Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

MESSAGES FROM THE QUEEN

DOUBLE TAXATION RELIEF

The VICE-CHAMBERLAIN OF THE HOUSEHOLD reported Her Majesty's Answer to the Address, as follows:

I have received your Addresses praying that the Double Taxation Relief (Taxes on Income) (Malaysia) Order 1997, the Double Taxation Relief (Taxes on Income) (Singapore) Order 1997, the Double Taxation Relief (Taxes on Income) (Falkland Islands) Order 1997 and the Double Taxation Relief (Taxes on Income) (Lesotho) Order 1997 be made in the form of the drafts laid before your House.

I will comply with your request.

SUMMER TIME ORDER

The VICE-CHAMBERLAIN OF THE HOUSEHOLD reported Her Majesty's Answer to the Address, as follows:

I have received your Address praying that the Summer Time Order 1997 be made in the form of the draft laid before your House.

I will comply with your request.

Oral Answers to Questions — TREASURY

The Chancellor of the Exchequer was asked—

Inward Investment

Dr. Stoate: If he will make a statement on the impact of the Green Budget on the Government's policy on inward investment into the United Kingdom. [16585]

The Chancellor of the Exchequer (Mr. Gordon Brown): Our policies for stability, for sustainable public finances, for long-term investment, including our cuts in corporation tax, and for skills and employment will enhance the attractiveness of the United Kingdom as a location for inward investment.

Dr. Stoate: Does my right hon. Friend agree that partnerships between the public and private sectors, such as the Kent Thames-side group, which is working for the regeneration of north-west Kent including my

constituency of Dartford, are the blueprint for inward investment and stable growth that this country needs and that this Government can deliver?

Mr. Brown: I am grateful to my hon. Friend. I understand that this morning he launched an exhibition on the Kent Thames-side region, and I wish him well in his efforts both to form an effective public-private partnership there and to attract inward investment. What is absolutely clear is that for inward investment we need a stable monetary framework—that is why we gave the Bank of England independence—a commitment to Europe, sustainable public finances and measures such as our cuts in corporation tax for long-term investment, which are all measures that we support. We have still to hear what the Opposition think of them.

Mr. Nicholas Winterton: While the Chancellor will know of my deep commitment to manufacturing industry and while I commend him on some of the actions that he has taken, is he not worried that in the short term the changes that he has made to corporation tax will cause many companies to have liquidity problems, so that in the short term there will be a problem with investment? Will he perhaps give that matter serious consideration?

Mr. Brown: I am grateful to the hon. Gentleman for raising that matter. He has always championed the cause of manufacturing industry. I must tell him that businesses have welcomed our proposals: they accept that it is necessary to move to the abolition of advance corporation tax and have welcomed our cut in corporation tax. It is a measure of how much the Conservative party is now out of touch with business that Conservative Members cannot welcome our proposals.

Mr. Gunnell: Is it not true that the one policy mentioned by the Chancellor on which we are certain where the Conservative party stands is the policy on Europe? Is it not also true that our commitment to Europe and our insistence that we will be at the heart of Europe are particularly attractive to inward investors after the uncertainties that they suffered with the previous Government's position?

Mr. Brown: I am grateful to my hon. Friend, with whom I remember working for many years and who has always been a champion of inward investment for Yorkshire. I think that most people in business agree that a stable policy on Europe—one that will make people sure that this country is committed to Europe—will benefit Britain. It is therefore unfortunate that we do not have all-party support for that policy.

Mr. Lilley: I congratulate the Chancellor on his well-deserved award at the Spectator"parliamentarian of the year award" lunch yesterday. Can he confirm that the combined effect of his July and November changes in corporation tax, after taking account of the changes in the rate of tax, will mean that, over the lifetime of this Parliament, British business will have to pay £20 billion more tax?

Mr. Brown: I do not accept those figures at all. The corporation tax cut will give business an extra


£1.5 billion a year. The transitional costs having been met, business will be £1.8 billion a year better off. I thank the right hon. Gentleman for his good wishes on The Spectator award, but if he is going to pursue this course of action, he had better explain why Adair Turner, secretary general of the Confederation of British Industry—[Laughter.] It is interesting that Conservative Members now scoff at the CBI. That is what has happened to the Conservative party.

Mr. Nicholas Winterton: Red Adair.

Mr. Brown: The Conservatives now call the secretary general of the CBI "Red Adair". That is how far the Conservatives have sunk and how far they have moved away from business. One of their friends at the Institute of Directors, Mr. Richard Baron, its taxation executive, said that abolition of ACT was wonderful for companies. The Institute of Directors, the CBI, the chief executive of BP, and many others, including the Financial Times, have welcomed the proposals.
I fear for the Conservative party. It has moved so far from business that in Scotland, business people who were pro-Conservative are trying to form their own pro-business party to fight the Conservatives. I think that the Conservatives should go back to Eastbourne, hold another bonding session and think again.

Mr. Lilley: Is the Chancellor then denying the figures that he himself published, which show that, over the lifetime of this Parliament, British industry will have £20 billion less to invest and to create jobs with? Does he deny that the effect of his changes will be to make investment abroad more attractive and investment at home less attractive? Those are the figures on page 19 of the document "A Modern System for Corporation Tax Payments", which the right hon. Gentleman published. The document also shows a figure of £2 billion a year extra taxation during this Parliament as a result of the changes announced in November.
Can he confirm that, in the borrowing forecasts that he issued for this Parliament on Tuesday, he did not take into account the extra revenues that he is to raise from the changes in corporation tax, and will he explain why he did not do so? Is it because he did not want Labour Members to realise that he was raising several times more than it would cost to meet recent demands to defer certain changes in benefits?

Mr. Brown: If the right hon. Gentleman is going to read out that document, perhaps he will remind the House—[HON. MEMBERS: "Answer the question."] I am about to—[Interruption.] They must listen, Madam Speaker. I am about to quote from the very document that the shadow Chancellor mentioned. Will he not thank us for the cut in corporation tax in July, and the further cut announced on Tuesday, and will he read to the House the passage that states:
After the transition, the annual impact is an Exchequer cost of about £2 billion a year"?
We are doing something to help long-term investment. That is the reason why it is being supported as a principle by business.

Public Expenditure

Dr. Tony Wright: If he has plans to set a target for public spending as a share of gross domestic product. [16586]

The Chief Secretary to the Treasury (Mr. Alistair Darling): We have no plans to set a target for public spending as a share of GDP.

Dr. Wright:: Does my right hon. Friend recall that the previous Government wanted permanently to reduce public spending as a share of GDP? Does he further recall that the dogma of that ambition was exceeded only by the incompetence of their attempt to achieve it? Can he tell the country that the days of dogma are gone, that spending on high-quality public services will be a first claim on a growing economy, and that, even under an iron Chancellor, fiscal prudence will never be confused with fiscal parsimony?

Mr. Darling: My hon. Friend is right in that the previous Government ended up spending almost exactly the same share of the national income at the end of their 18 years as they did at the start. He is also right in saying that, although the amount that they spent did not change, what the money was spent on did change. They had to spend more and more on mopping up the failures that their misguided policies created.
The objective of our comprehensive spending review is to examine each and every penny that the Government spend. The test for this Government is not just how much is spent but where it is spent and to what effect. I agree with my hon. Friend that public spending is extremely important for building economic prosperity—important in economic terms and important in social terms; but it is fundamental that we achieve the long-term stability and sustainable public finances that will allow the economy to grow as well ensuring that we have the wealth to provide the services that we all want.

Mr. Jenkin: Should we conclude that the threats to benefits for disabled people and the lengthening hospital waiting queues, alongside massive increases in taxes, rising interest rates and slowing economic growth, are somehow a price worth paying for achieving the criteria for economic and monetary union?

Mr. Darling: The hon. Gentleman is, as ever, obsessed with Europe. He sees Europe behind just about everything. The country will remember that the Conservative party systematically denigrated those on benefits and systematically undermined the benefits system without regard to the consequences. We are determined to build a stable economic platform so that we achieve growth and so that the finances of the country are put on a sustainable long-term footing so that we can provide the very services that hon. Members—certainly Labour Members—want to see in the future.

State Pensions

Mr. Bill O'Brien: What discussions he has had with the DSS about the level of future financial provision for state pensions. [16587]

Mr. Darling: I have regular meetings with my right hon. Friend the Secretary of State for Social Security, at which we discuss a wide range of issues, including pensions.

Mr. O'Brien: I thank my right hon. Friend for that reply. Will he accept from my constituents and all Labour Members sincere thanks for the statement by my right hon. Friend the Chancellor last Tuesday, in which he announced help for pensioners throughout the winter and over the Christmas period? That is most welcome. Will my right hon. Friend continue that good work in his talks with my right hon. Friend the Secretary of State for Social Security on improving pensions to a standard at which people no longer rely on handouts, but are offered a pension that sustains the quality of life that the old people of this country deserve?

Mr. Darling: I am grateful for my hon. Friend's support for the announcement on Tuesday. My hon. Friend has been in the forefront in campaigning for pensioners. I saw that when I visited his constituency recently. Of course, he is right. The Labour Government have delivered their promises to pensioners. We have cut VAT on fuel to 5 per cent. We have uprated pensions in line with prices, as we promised. We have cut fuel bills for pensioners by up £100 a year and there is more to come.
My right hon. Friend the Secretary of State for Social Security has announced a pensions review. We are encouraging pensioners to ensure that they receive all the entitlements that are available to them. Last week, we launched a document on stakeholder pensions which is designed to encourage people to have fully funded pensions in future. Next year we shall consult on the new citizenship pension. The Labour Government are delivering their promises to pensioners and, as a result, this winter many pensioners will no longer have to worry about whether they can heat their houses—something that never happened when the Tories were in power.

Mr. St. Aubyn: Will the Chief Secretary explain to a constituent of mine—a pensioner whom the pensions tax has hurt particularly hard because he belongs to a closed pension scheme—why he refused to extend to closed pension schemes the benefits afforded to charities when the pensions tax was introduced?

Mr. Darling: I am grateful to the hon. Gentleman for referring to the measures we took in respect of charities— we appreciate that degree of support. As I have said before to the House and to the hon. Gentleman, our reforms to corporation tax announced in July and the further reforms announced on Tuesday are designed to encourage profitability in this country's companies, which, in turn, will benefit pension funds. The fact is that,

since July, the reforms we have implemented have been widely welcomed as the far-sighted and long-term reform that people in this country wanted.

Mr. Ian Bruce: What about the stock market?

Mr. Darling: The stock market, which has a substantial bearing on the value of one's pension at retirement, has climbed since we were elected, which shows—among other things—that there is another sector that has absolute confidence in the Government's ability to deliver long-term, sustainable economic growth that will benefit pensioners and everybody else.

Mr. Campbell-Savours: May I say to my right hon. Friend that there is no such thing as the pensions tax?

Mr. Darling: I agree—there is not.

Inflation

Mr. Hammond: What assessment he has made of the measures that will be required to control domestic inflation, with particular reference to house prices, in the event of United Kingdom interest rates converging with those prevailing in the other major economies of the EU. [16588]

The Paymaster General (Mr. Geoffrey Robinson): None, Madam Speaker.

Mr. Hammond: Will the hon. Gentleman give an assurance that, in pursuing convergence of interest rates so as to achieve his objective of joining a single currency, he will not find that he has to increase the tax burden on the British people in order to achieve his inflation targets?

Mr. Robinson: The question was muddled—I now understand what the hon. Gentleman wanted to say. The position is simple: the Governor sets the monetary policy to achieve the inflation target set by the Chancellor.

Mr. Stringer: Does my hon. Friend agree that the tough measures that he has had to take stand in marked contrast to the policies of the previous Government; and that the failure of the previous Government's policies led directly to nearly 1 million people losing their homes?

Mr. Robinson: My hon. Friend is absolutely correct. It is precisely because the Conservative party did not have the political courage to give operational independence to the Bank of England that economic policy was too often dictated by political expediency. That is why we experienced the two biggest recessions and the two biggest periods of inflation during 10 years of hopelessly incompetent macro-economic policy under the Conservative party.

Mr. Bercow: The Minister had a little difficulty with the question asked by my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond)—I hope that he can do better this time. Can he give the House an assurance that, if this country joins a European single currency and if the interest rate across Europe is inappropriate for the control of domestic inflation, he and


his Government will be willing and able to make representations against the interest rate policy of the European central bank?

Mr. Robinson: The hon. Gentleman is as muddled as his hon. Friend. My right hon. Friend the Chancellor made it absolutely clear that five tests would have to be met, the central one of which was convergence. Central to convergence is convergence of interest rates and the question of entry does not arise until that is sustained and a sustainable period of convergence has been achieved.

Economic and Monetary Union

Mr. Cranston: What steps he proposes to take to help business prepare for economic and monetary union. [16589]

Mr. Bayley: If he will make a statement on the steps he is taking to help businesses prepare for economic and monetary union. [16602]

Mr. Gordon Brown: The Government are committed to ensuring that British business is well equipped to take advantage of the introduction of the euro in other member states from 1999. We have set up a new standing committee, the members of which include the president of the Confederation of British Industry and the president of the British Chambers of Commerce, alongside the existing business advisory group to co-ordinate and press forward the preparations agenda. I will be publishing a summary of the advisory group's findings early in the new year.
I have also arranged for the Treasury to publish a practical guide to EMU for business and 55,000 copies have already been issued to a wide range of businesses.

Mr. Cranston: I thank my right hon. Friend for his answer, especially in relation to the establishment of the standing committee. He will be aware that Marks and Spencer has announced that it will install tills to take the euro. Does not that show how British business is getting on, in a practical and pragmatic way, with dealing with the single currency, while the Conservative party is in an ideological time warp?

Mr. Brown: I agree entirely with my hon. Friend that what frustrated British business was the previous Government's inability to help them with preparations to cope with the introduction of the euro in other member states in 1999. Marks and Spencer has said that it will have the capacity to deal with the euro in the United Kingdom as well as Europe. Other companies such as the National Westminster bank are preparing to trade in euros and to train staff to do so. The Conservative party should wake up to the fact that this is something that is going to happen in other member states in 1999, and it should stop its ideological opposition to a single currency.

Mr. Bayley: Does my right hon. Friend agree that large companies will, in future, increasingly be manufacturing and marketing their products on a pan-European basis and that, as such, they will be concerned about the predictability and stability of exchange rates when making their investment decisions? How does my right hon. Friend think British business will react to the

Conservative party when it pursues a policy of saying that it will not join a common currency even if it is in the national interest to do so?

Mr. Brown: I am grateful to my hon. Friend. British business is reacting: business men in Scotland are about to set up their own party even though they are Conservatives because they are so out of touch with the Conservative party. As for business preparations, I think that business understands and the Conservative party will soon understand—if it does not listen to what its Conservative Members of the European Parliament are telling it, the public will tell it—that 50 per cent. of our trade is with the European Union, more than 60 per cent. of our trade is with Europe and 30 per cent. of inward investment into Europe comes through Britain. It is important for the Conservative party to wake up to those realities.

Mr. Quentin Davies: What is the point of spending all this public money on so many publications if they are shoddily produced or even deceptive about the facts? The document that I have with me, which I think every hon. Member has received, called "UK Membership of the Single Currency", deals on page 10 with the important matter of interest rate convergence. It sets out and compares current nominal interest rates. The Chancellor knows perfectly well that it is not nominal, but real, interest rates that are important for economic behaviour.
If we compare current real interest rates—nominal interest rates minus inflationary expectations—we see that the gap is very much less than that set out in the document. Was that just a schoolboy howler, or were the document's authors, the Treasury Front-Bench team, determined for their own reasons to exaggerate, even dishonestly, the difficulties that this country will have to overcome to converge on interest rates and join a single currency?

Mr. Brown: The hon. Gentleman is advancing an interesting case: he is putting a case for entering the single currency in 1999; he is totally at odds with his colleagues on the Opposition Front Bench who want to delay entry for 10 years. I have made it clear that we shall have to meet five economic tests, not one. Some of those tests are: unemployment must come down; investment must benefit; inward investment must benefit. The hon. Gentleman should start questioning his own Front-Bench team, as they do not seem to have any answers for him.

Sir Robert Smith: In the committee that the Chancellor of the Exchequer has announced, how are the views and concerns of self-employed people and small businesses to be taken into account?

Mr. Brown: The small business community is already represented on the business advisory committee; it will be on the wider group; it will be consulted on such matters. The Federation of Small Businesses is represented on the business advisory group. The shadow Chancellor is out of touch with events, and should go back and do his homework.

Mr. Skinner: Is my right hon. Friend aware that, long before Marks and Spencer is using the euro, lone parents will be visiting the stores to spend money, and that some of those parents will have less money if the Government


continue to implement the Tory dogma contained in the Social Security Bill? I know that my right hon. Friend is against Tory dogma, so let us get rid of the proposal that will penalise lone parents.

Mr. Brown: It is because we are against Tory dogma that we are giving lone parents new opportunities that they never had under the previous Government. We are giving them opportunities for work, opportunities for training, opportunities for child care—up to 1 million child care places as a result of our £300 million investment. When people see the range of new opportunities available as a result of a £200 million welfare-to-work programme and a £300 million child care programme, they will welcome the changes that we are making.

Mr. Heathcoat-Amory: A written answer from the right hon. Gentleman's Department on 11 November confirms that the Government have no estimate or idea of the cost to businesses, the public or even the Government of converting to the euro. Is it not a disgrace that the Government are calling for a national debate on monetary union without having any idea of what the costs are likely to be? Since unofficial estimates of those costs range up to £19 billion for the private sector alone, will the Chancellor replace his hot air and rhetoric with some hard estimates and facts about what the likely costs of conversion will be, and will he report them to the House?

Mr. Brown: If the right hon. Gentleman is so interested in that question, why did he not bother to find out the answers when he was the Treasury Minister responsible for those issues? We are now making the preparations and looking at all the necessary detail. The previous Government failed to do that, because they are completely divided over Europe.

Inflation

Mr. Ruffley: If he will make a statement on his policy for controlling inflation. [16590]

Mr. Darling: The Government's policy for controlling inflation is absolutely clear. We have a target of underlying inflation of 2½ per cent. We have put in place the necessary institutional reforms to ensure that the Bank of England delivers that target which has been set by my right hon. Friend the Chancellor.

Mr. Ruffley: Is the Chief Secretary aware of concern in the City about how the Government will measure inflation in the future? Will he therefore give an undertaking to the House that the Government will not change the basis of measuring inflation from RPI X to the European Union harmonised index of consumer prices?

Mr. Darling: The Conservative party is so obsessed with Europe that it cannot see anything rationally. The position is quite clear. The Government have set out their target of 2.5 per cent., and that is only likely to change if, when the circumstances are right, my right hon. Friend the Chancellor comes to the view that that target should be revised downwards. It is widely understood that the target is 2.5 per cent.

Mr. Malcolm Bruce: I hope that the Chief Secretary will accept that the Liberal Democrats greatly welcome

the Chancellor's proposals to lock in economic stability, in particular the fiscal code, but can he explain to the House why the Chancellor is forecasting an inflation rate of 3 per cent. at the end of next year, while the Bank of England is forecasting an inflation rate of less than 2.5 per cent? Is that because the Government are concerned that there is a risk of moving to a mini boom-bust cycle, not least because they have revised downwards their growth forecasts for the same period?

Mr. Darling: I am grateful to the hon. Gentleman if he supports the Government's policy on fiscal stability, which is something of a change from what he has said at treasury questions in the past. The position of the Government and Bank is clear; our target is 2.5 per cent., and we are confident that all the measures that we have taken and the Bank has taken will result in us meeting it.

Mr. Ian Bruce: I wonder whether the right hon. Gentleman can explain to me what is meant by the term that he keeps using—"fiscal stability". Given that the Bank of England has been changing the interest rate virtually every month, will we achieve fiscal stability when it does that every week? Did the Bank get it wrong four out of five times, or is he satisfied that its policy is the right means to get inflation down? After all, inflation is going up while it is changing those rates.

Mr. Darling: As I have said before, fiscal stability means ensuring that we get stability in public spending and stability in taxation. The hon. Gentleman is referring to the Bank's monetary policy—[Interruption.] They are complementary, but they are different. As I have said on many occasions before, the Bank has had to increase interest rates because, in the six months before the election, the previous Government did absolutely nothing to deal with the inflationary pressures that were mounting in the economy.
We are determined that the necessary action will be taken in terms of monetary policy and the other measures that my right hon. Friend the Chancellor has announced. They will ensure that we have stability so that we can increase the capacity of the economy, and begin to remove the inflationary pressures which would otherwise exist in the economy. Under this Government we will get long-term stability—and, unlike the previous Government, this Government are not afraid of taking the necessary tough decisions.

Mr. Boswell: I am sure that the right hon. Gentleman will have noticed that his right hon. Friend the Chancellor is not a touchy-feely kind of person, but neither of them is averse to a little bit of ear-stroking of the representatives of industry. Has the right hon. Gentleman not noticed press reports that the Post Office, which is the largest corporation remaining in state ownership, recently settled a 4 per cent. increase in wages, and will he not concede that that, combined with his own projections of the growth rate sinking to as low as 1.5 per cent. in a little over 12 months' time, inevitably means that high and rising unemployment will result?

Mr. Darling: There are two points there. If the hon. Gentleman considers public and private sector wage settlements over the course of this year, he will find that they have been very low. Most people will welcome that,


because they know that we have a choice: we can blow our current prospects in higher wage increases, which lead to higher inflation and therefore higher interest rates and higher mortgage rates, or we can take the opportunity to get sustainable growth in the long term, which will mean increasing prosperity for individuals and ensure that we generate the necessary wealth to improve the public services—and we all want that.

Charities

Mr. Green: What representations he has received from charities regarding dividend tax credits; and if he will make a statement. [16591]

Mr. Geoffrey Robinson: We have received some 500 representations, half of which have related to VAT matters, about 20 of which have been concerned with tax credits.

Mr. Green: Is the Minister aware that Mencap has confirmed that it will have to find £750,000 to top up its employee pension fund as a direct result of the pension tax introduced in the Budget? Does he agree that that £750,000 would be better spent on Mencap's important charitable purposes than on filling the Treasury's coffers? What remedies does he have to offer the large charities in this country, which would prefer to spend their money on charitable purposes than to fill the Treasury's coffers because of the unnecessary imposition of a swingeing pensions tax in the Chancellor's Budget?

Mr. Robinson: The large companies will benefit from the 10 per cent. rise in the stock market that has taken place since Labour came to office. I was at a recent Mencap meeting, hosted by George Bull, and was very supportive of that charity, which does especially good work. The hon. Gentleman must be aware that, unprecedentedly, the Labour Government—acting much more generously than the Conservative Government did when they took action on tax credits—have delayed the starting date for two years, until April 1999, and there is a further five-year transition period, at a cost of £1 billion to the Government. That is very good treatment.

Ms Ward: Will the Minister take into account the representations that I have received from many constituents, regarding their anxieties about possible tax changes and their effects on charity shops? Will he recognise how important charity shops are, not only to the charities that they work for, but to the local community?

Mr. Robinson: I entirely agree with my hon. Friend and I can confirm to her that the position of charity shops is a fundamental part of the charities review, which is under way now and due to report in the spring.

Mr. Rowe: As so many of the services that used to be public services are now rendered by charities, has the Minister made any assessment of the costs to the public purse if charities are forced to retrench on the services that they offer because of the various tax threats hanging over them?

Mr. Robinson: It is a pretty poor reflection on the previous Government if their plans eventuated in charities

undertaking necessary public services, but we are aware of the great work done by charities. The charities review is under way, which is considering VAT matters and other matters, and there is a seven-year transition period. Charities have time—I am sure that they will profit from it—to ensure that they can carry on the very good work that they do.

Rev. Martin Smyth: I welcome the assurances about tax credits and charity shops, but will the Minister bear in mind that many charities are suffering under the impact of the national lottery? The charity review needs to take into account not only pension funds but the impact of tax credits on charities' everyday money to help people in need.

Mr. Robinson: That, too, will be part of the review.

Barnett Formula

Mr. Randall: If he will make a statement on the future of the Barnett formula. [16592]

Mr. Darling: The Government have made it clear that they intend to keep the existing arrangements. The Government's position was clearly set out in the two White Papers on which the referendum campaigns in Scotland and Wales were fought and won.

Mr. Randall: I thank the Minister for that reply. Does he agree with members of his own party that there should be cuts in Scottish public expenditure?

Mr. Darling: I do not think that anyone is saying that. We are determined to ensure that all parts of the country benefit from our economic policies and our spending decisions. That has always been so, and it always will be.

Mr. Dalyell: After all the assurances given in and out of the House before and during the referendum, were there by any chance to be any tampering with the Barnett formula, would there not then be a moral obligation to hold yet another referendum on the question, "Do you approve of the Scotland Act 1997–98?"

Mr. Darling: I never thought I would see the day when my hon. Friend the Member for Linlithgow (Mr. Dalyell) would call for another referendum on devolution. Our position was clearly set out in the White Paper; it remains our position.

Mr. Wallace: I welcome the Chief Secretary's affirmation that that will be the position. I am sure that he would agree, having campaigned on a White Paper in which the Barnett formula was a key component in the funding of the Scottish Parliament, that any Government departure from that position would be a breach of faith. But if there is a need to investigate divergence, will the right hon. Gentleman bear in mind that, under the local government distribution from central Government, Westminster gets £864 a head and Rutland gets £213 a head, which is a greater divergence than any between Scotland and the rest of the United Kingdom?

Mr. Darling: The hon. and learned Gentleman will know that the Deputy Prime Minister is to make a statement on the local government settlement for England shortly. I do not think I ought to anticipate it.

Mr. Rhodri Morgan: Does the Chief Secretary agree that it would be supremely self-contradictory if the


Barnett formula were now to be abandoned, given that it was invented 20 years ago to cope with the then anticipated devolution of 1978–79? Would he further agree that, in the experience of all countries to have introduced it, devolution can be introduced successfully only if there is an effective resource transfer mechanism from rich to poor regions?

Mr. Darling: The principle of ensuring transfers between the regions and nations of the United Kingdom has been stuck to by successive Governments of both political colours. I repeat what I said at the outset: the Government fought and won the referendums on the basis of the White Papers; that remains our position.

Mrs. Ewing: Perhaps the Chief Secretary would like to count up the number of Members of Parliament who had heard of the Barnett formula outwith the past couple of weeks. More seriously, what assessment has been made of needs? What commitment is there to ensuring that these arrangements continue? We should bear in mind the point raised yesterday with Madam Speaker about the Treasury Committee's assessment of the Barnett formula. May we have an assurance that these discussions will be open and transparent?

Mr. Darling: This Government are always open. I would agree that there are many people outside and not a few inside the House who may not be aware of what the Barnett formula does. I would commend to them the evidence recently received by the Treasury Select Committee. At the risk of repeating myself, I will state that the Government's position on Barnett and needs assessment remains exactly as set out in the White Papers.

European Single Currency

Mr. Reed: What representations he has received on the consequences of British entry into the European single currency after 1999. [16593]

Mr. Gordon Brown: My statement of 27 October on economic and monetary union was widely welcomed in this country. Representations are still being received.

Mr. Reed: I thank my right hon. Friend. Will he comment on the contrast between the Government's policies in Europe, which have given us a leading voice with business in Europe, and the Conservative party's policies? The right hon. Member for Henley (Mr. Heseltine) has said that the Tories are leading the fight against British companies, and we have heard some examples of that today; does my right hon. Friend agree that their increasing isolationism in Europe is leading to increasing isolation in the opinion polls?

Mr. Brown: I am grateful to my hon. Friend. We have declared for the principle of monetary union: we have not yet had an answer from the Conservative party. We have said that there is no constitutional bar to entry: we have not yet had an answer from the Conservatives. We have said that the economic tests will be decisive, and if entry is in the national interest, that is what we shall do: we have not yet received Conservative party policy.

It is small wonder that the former Deputy Prime Minister has said that the Conservative party has fallen out with Britain's leading companies.

Sir Peter Tapsell: Has it occurred to the Chancellor of the Exchequer that by 1999 the danger of inflation may be rather less than the danger of deflation? If that should come about, the economic criteria for the establishment of a single currency laid down in the Maastricht treaty will be not only irrelevant but exceedingly damaging for the people of this country.

Mr. Brown: That was exactly the proposition that was put forward in 1987, and it led the Conservative Government to cut interest rates, cut taxes and cause boom and bust conditions, as a result of which 1.5 million people lost their jobs and businesses were destroyed. We shall have stability in our economy, and we shall not return to the stop-go days of the Conservative party in government. Even now, they should apologise to the British electorate for what they did.

Economic Growth (North-East)

Mr. Cousins: When he next plans to meet the north-east regional Chamber of Commerce to discuss economic growth. [16594]

The Financial Secretary to the Treasury (Dawn Primarolo): rose—

Hon. Members: Hear, hear!

Dawn Primarolo: I am touched by the support shown by Opposition Members.
My right hon. Friend the Chief Secretary was recently in the north-east to give the Darlington economics lecture to the local employers forum. Although there are no immediate plans for a meeting with the regional chamber, Treasury Ministers regularly meet business representatives, and pay careful attention to what they have to say.

Mr. Cousins: I thank my hon. Friend for her reply. Does she accept that we have very few fat cats in the north-east? With our colleagues in Wales and Northern Ireland, we are last in and first out of any recovery. We understand that the Government have had to make tough choices to secure stability, but does she accept that high interest rates, the strong pound and our exposure due to links with south-east Asia have given us special and particular problems? Is she willing to meet some of us involved in business and some of my hon. Friends from the north-east to work out how we could match the tough patience that we shall need with the tough choices that the Government have had to make?

Dawn Primarolo: Recent business surveys indicate that the north-east economy is performing well. In particular, north-east manufacturing industry is growing at a reasonable pace. My hon. Friend has made important points. The Government's policies on regional development agencies and the consultation document that will be released shortly reinforce our determination to


ensure prosperity in our regions. I should be happy to discuss with him how those policies can be developed further in the north-east.

Miss McIntosh: Has the Financial Secretary had the opportunity to consider the impact on the local economy in North Yorkshire of the collapse of the Samsung plant at Flaxby moor? Will the Government review the effect that the collapse of south-east Asian economies may have on job prospects and economic development in north Yorkshire generally?

Dawn Primarolo: The Government are vigilant on all matters, especially jobs. We need to ensure that the economic framework is sound, so that business can invest, grow and survive in our communities.

National Minimum Wage

Mr. Burns: If he will estimate at what level of national minimum wage the current departmental spending limits would be breached. [16595]

Mr. Darling: The level of the minimum wage has not yet, of course, been set. The hon. Gentleman will be aware that the National Minimum Wage Bill received its First Reading today. The level of the national minimum wage will not be decided until the Government have the benefit of advice from the Low Pay Commission, which has already started work.

Mr. Burns: I am grateful to the Chief Secretary for that answer. I am slightly surprised, however, that his officials have not been carrying out any studies of the impact of a minimum wage at different levels on the Government's spending targets. Will the right hon. Gentleman give a categorical assurance to the House that, if the level of a minimum wage, when it is set, has any impact on the wages bill of the national health service, patient care will not suffer and the Government will make up any shortfall?

Mr. Darling: It is a bit rich for Opposition Members to lecture us on patient care after their record for 18 years— [Interruption.]The hon. Gentleman does not like being reminded of what the Tories did to the NHS. The minimum wage will be set at a sensible level that is manageable, and we shall keep the promises to the health service that we made during the general election campaign. We are ready to be judged by that at the next election.

Ms Abbott: Are not the arguments against a minimum wage at a decent level, as put by Tories in business, exactly the same as the arguments advanced by the same people in the 1970s against equal pay for women, being based on the premise that a minimum wage will lose jobs? Just as equal pay for women did not lose jobs but did more to raise the living standards of working-class women than any other act of the Labour Government, will not the minimum wage have the same effect?

Mr. Darling: My hon. Friend is right. The Conservative party has always been against any economic or social progress. We were told that equal pay would spell the end of British industry, and the Tories say

exactly the same about a national minimum wage. We believe that a national minimum wage is right in principle and that it will be good for the economy.

Mr. Forth: Is the Chief Secretary suggesting that it is possible that a minimum wage level, when set, will be at such a low level that it can have no impact on budgets or cash limits in the health service and other public services?

Mr. Darling: As I told the hon. Member for West Chelmsford (Mr. Burns), the Government will decide the level at which the national minimum wage will be set when they receive the benefit of the advice and evidence of the Low Pay Commission.

Mr. Pike: Is it not increasingly obvious that the public support the policy of a national minimum wage and oppose poverty pay, whether in the public or the private sector? They believe that the implementation of such a policy is long overdue. They obviously welcome the policy announced earlier this week by my right hon. Friend the Chancellor of the Exchequer, and believe that it will prevent those who go into work from losing out as a result of the present conflict between benefits and tax. It is a good policy, and it is overwhelmingly welcomed by the people.

Mr. Darling: I am grateful to my hon. Friend for his support. He is right to say that it is the Government's strategy to ensure that as many people as possible are encouraged to go into work. To that end, we want to remove some of the barriers that face people coming off benefit and going into work. Our strategy is geared to achieve that. As for the minimum wage, many people will wonder why the previous Government put up with a situation in which some employers paid wages so low that their employees were being subsidised by decent employers and by the public purse. That is an intolerable situation and one that we are determined to end.

EU Tax Co-ordination

Mr. Gibb: If he will make a statement on his Department's policy towards the European Union paper "Towards Tax Co-ordination in the European Union". [16597]

Dawn Primarolo: The Government deposited an explanatory memorandum on 17 November on the Commission communication of 5 November 1997, "A Package to Tackle Harmful Tax Competition in The European Union." The issue was debated yesterday in European Standing Committee B.

Mr. Gibb: This European Union proposal, which the Chancellor of the Exchequer intends to agree to at Brussels on Monday, breaches the principle that the EU does not involve itself in direct tax policies of member states. Why do the Government think that it is necessary to do this?

Dawn Primarolo: As I explained repeatedly to the hon. Gentleman yesterday in Committee, the code is a voluntary agreement. There are no sanctions and it is not legally binding. It specifically recognises national


competence in direct tax issues. There is no giving away of sovereignty on this issue. The hon. Gentleman is simply wrong.

Mr. Derek Twigg: Does my hon. Friend agree with the Leader of the Opposition when he says that we should realise a single currency for the next Parliament, or does she think that the shadow Chancellor is right when he says that we should not bind future Parliaments?

Dawn Primarolo: It will not surprise my hon. Friend to hear that I agree with my right hon. Friend the Chancellor and with the Government's policy on that issue.

Local Authority Expenditure

Mr. Gorrie: What studies the Treasury has undertaken into the impact on (a) the national economy and (b) prospects for meeting the convergence criteria for economic and monetary union of the removal of local authority self-financed expenditure from the control total. [16598]

Mr. Geoffrey Robinson: I am not aware of any specific studies of that sort, but I look forward to hearing the hon. Gentleman's supplementary question.

Mr. Gorrie: The Government's insistence on retaining capping and on keeping local authorities' self-financed expenditure within the control total is a major reason for many local council cuts. It is therefore an important issue. Will the Minister explain why the Government are so insistent on that policy? If a council, reflecting the democratic wishes of its voters, raises £1 million more in council tax and invests it in employing 40 or 50 more teachers, those teachers will live and spend their money locally. Much of the money—perhaps a quarter or a third—will come back to the Treasury in increased taxes. How does that have a disastrous effect on the national economy, or prevent us from signing up to something with Europe? It is nonsense and I should like some explanation.

Mr. Robinson: The hon. Gentleman will be aware of the £1 billion extra that we have given to schools, which is £1 billion more than even his party asked for. On the narrow question of the control total, with which he seems to be obsessed, he, his local authority and other local authorities should consider what they can do in partnership with the private sector. We are introducing legislation to enable them to do that and we have set up a new energetic task force in the Treasury, run by the private sector, to get private-public partnerships going with local authorities. That is where he should put his efforts.

Mr. Willetts: Will the Minister confirm that, before spending any available money on schools or social services, local authorities are under a legal obligation to put money into their pension funds to make up the cost of his July tax measures?

Mr. Robinson: The hon. Gentleman knows that that question will not arise for two and a half years. It is being studied and we are in discussion with local authorities to find a proper resolution to it in due course.

Corporation Tax

Mr. Mullin: What plans he has to review the effectiveness of corporation tax; and if he will make a statement. [16600]

Mr. Geoffrey Robinson: rose—

Hon. Members: Come on.

Mr. Robinson: I apologise. I did not realise that question No. 15 had been passed. I apologise for the delay in locating Question No. 16.
We are satisfied with the excellent measures that my right hon. Friend the Chancellor took in the July Budget and announced in the pre-Budget document which we discussed this week. They put corporation tax on an excellent long-term basis. They do not distort competition and they make for investment. We are pleased with all the long-term, principled reforms that we have carried through.

Mr. Mullin: Has my hon. Friend noticed that some companies do not pay their fair share of corporation tax? One thinks, for example, of the Murdoch empire, which I believe paid only about 2 per cent. of its profits in corporation tax. Does he agree that that is unfair on companies which do pay their fair share? What plans does my hon. Friend have to ensure that all companies do so?

Mr. Robinson: If my hon. Friend brings the matter to the attention of the corporate division of the Inland Revenue, I am sure that it will investigate, if it is not already doing so. My hon. Friend will be aware that the Government have already announced four tough anti-avoidance measures for the corporate sector, which we expect will yield £1 billion in savings.

Mr. Yeo: Does the Minister understand that the changes in corporation tax announced two days ago greatly increase the amount of tax that companies will pay in the next four years? As that will inevitably reduce new investment by companies, what assessment did the Treasury make of the number of jobs that will be destroyed directly as a result of the Chancellor's statement?

Mr. Robinson: The statement has been welcomed by the Confederation of British Industry and by companies throughout the country because they recognise the principled reasoning behind it. The hon. Gentleman is getting his cash flow mixed up with his profits; if he would like a lecture on the subject after Question Time I shall be happy to give it to him.

Euro (UK Retailers)

Mr. Gordon Prentice: What discussions he has had with major United Kingdom retailers concerning their preparations for the introduction of the euro. [16601]

Mr. Gordon Brown: I have had many discussions with United Kingdom companies, particularly retailers, about the introduction of the euro.

Mr. Prentice: Does not the decision made by Marks and Spencer and others show remarkable foresight,


and does it not contrast with the immobilism of the Conservative party, whose members cannot make up their minds whether they are for or against the euro in principle? Is it not eccentric of the Conservative party to decide not even to consider joining the single currency for a decade, although to do so may be in the nation's economic interests?

Mr. Brown: I agree. I think that businesses are increasingly worried by the Conservative party's behaviour in this regard. Those who run businesses are practical people who want to get on with preparing for what will happen, but they are now faced with a Conservative party that cannot give them any answers about future policy other than ruling out the single currency for 10 years.
Of course, not only businesses are now against the Conservative party. The shadow Cabinet is being depleted week after week as its members resign as a result of the policy on Europe, and one former Conservative Member has been added to our side during the past few days. The downsizing of the Conservative party continues.

Mr. Soames:: Certainly not over Christmas.
I welcome the prudent steps that the Chancellor has taken to prepare business for possible entry to monetary union. Does he accept, however, that there is a vast gulf of misunderstanding in businesses of all sizes about what

monetary union actually means? In preparing the documents that he rightly intends to distribute to businesses, will the right hon. Gentleman ensure that those documents are carefully tailored to fit the sector and size of the companies to which they are sent?

Mr. Brown: I am grateful that the voice of one-nation Conservatism is now being expressed in the House. I entirely agree with the hon. Gentleman: business has a right to know the implications of the euro, and the last Government should have made those implications known long ago. We have published a pamphlet by Professor Currie, which sets out the arguments on the euro, and we have now also published a practical guide to the euro. Literature will be available to small businesses. They have a right to know how the euro will affect them, and how British business can benefit from it. We shall take the steps that the previous Government refused to take.

ROYAL ASSENT

Madam Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts

Firearms (Amendment) (No.2) Act 1997.
Local Government (Contracts) Act 1997.
Plant Varieties Act 1997.

Youth Crime

The Secretary of State for the Home Department (Mr. Jack Straw): With permission, Madam Speaker, I should like to make a statement on youth crime.
I am today publishing a White Paper entitled "No more excuses". It sets out the Government's new approach to tackling youth crime in England and Wales. It follows a period of intensive consultation, which began when we were in opposition. In May this year, I appointed a youth justice task force to advise me on the issue, and in September and October I published three consultation papers.
Reform of youth justice to make good years of mismanagement and under-performance is an urgent priority. In the past, the youth justice system has mimicked a bad parent, being indulgent one minute and harsh the next. Those are precisely the faults that foster youth crime, and they are compounded by the fact that the system suffers from endemic delays.
Many right hon. and hon. Members will have seen the problems in their constituencies. There are children whose misbehaviour goes unchecked and escalates into crime, and children who offend repeatedly, with no meaningful intervention, and come to court only for their cases to be adjourned time after time. When they are finally sentenced, many receive only a conditional discharge. There is no punishment, no chance for them to make amends for their crimes and no action to tackle the cause of their offending.
There must be no more excuses for youth crime. Before the election, we promised to halve the time from arrest to sentence for persistent young offenders, as part of a fundamental reform of youth justice. The White Paper sets out how we will deliver those pledges. We will make a start through the crime and disorder Bill, which is to be laid before Parliament shortly.
One of the fundamental deficiencies of the youth justice system is that different agencies work to different, even conflicting, objectives. The crime and disorder Bill will make it clear, for the first time, that the principal aim of the youth justice system is to prevent offending by young people. All youth justice practitioners will be under a duty to take account of that aim.
To tackle youth crime effectively, we must recognise that young people often start down the path of offending when they are very young. Therefore, the Bill will provide new powers to protect children under 10 from being drawn into crime. Local authorities—after consultation with the police and the community—will be able to set up local curfew schemes for the under-10s, and a new child safety order will help to stop individual children under 10 from drifting into crime.
Many factors draw young people into offending. Not attending school, through truancy or exclusion; having delinquent siblings or friends; coming from a family with multiple problems; and, for older teenagers, being unemployed—all those factors increase the risks of juvenile criminality.
The Government are taking action to tackle the causes of juvenile crime across the board, by raising school standards; by fighting truancy and under-achievement;

by combating social exclusion; by helping families at risk; and by giving the young long-term unemployed a pathway from welfare to work.
We know that the single most important factor associated with youth criminality is the quality of a young person's home life—crucially, the relationship between parents and children, and the level of parental supervision. The parents of young people who offend or who are at risk of offending need particular support and guidance. They should be made to face up to their own responsibilities. A new parenting order will therefore require parents to attend guidance sessions and to comply with requirements specified by the court to help them to control the behaviour of their children.
However, families are about much more than preventing crime. Families are the fundamental unit in society, providing mutual care and support and helping to shape the values of future generations. At the Prime Minister's request, I am chairing a new ministerial group looking at wider ways of supporting families more effectively and of promoting good parenting.
Young people, too, should face up to the consequences of their offending. The present rule of doli incapax— being incapable of evil—can stand in the way of holding properly to account 10 to 13-year-olds who commit crimes, yet young people of that age know that it is wrong to steal, vandalise or commit an assault. We intend to abolish that archaic rule to ensure that such young people are answerable for their offences.
Firm action is needed when young people begin to offend, but that does not happen at present, so we will replace repeat cautions with a new reprimand and final warning scheme to provide a consistent, graduated police response to youth crime, within a clear statutory framework.
A final warning will normally trigger a tailor-made intervention programme with the offender and his or her family, to tackle the causes of the offending. Once a youngster has had a final warning, the firm presumption will be that he or she will be charged with any further offence.
The Government will give the courts a much wider range of powers to help to change offending behaviour. Reparation and apology can bring home to young offenders the harm that their offending has caused. The crime and disorder Bill will provide a reparation order and make reparation available as a requirement of a supervision order.
There will also be a new action plan order providing an intensive programme of intervention with offenders and their families, combining punishment, reparation and rehabilitation, as an alternative to custody.
Custody is, however, necessary for the most serious or persistent young offenders, and for some young people, it may be the only effective way of preventing offending while they are awaiting trial. The courts' existing powers to remand young people to secure facilities are wholly inadequate.
The crime and disorder Bill will therefore pave the way for powers for the courts to direct that 12 to 14-year-olds and 15 and 16-year-old girls who are charged with serious offences—and who have a history of absconding or offending on bail—are held on remand in secure local authority accommodation. The Bill will also enable the


courts to direct that particularly vulnerable 15 and 16-year-old boys also held in local authority secure accommodation when a place is available, rather than remanded to prison.
For the minority of young offenders whose crimes require that they are sentenced to custody, public protection is best served if sentences and regimes work to change anti-social behaviour and equip those youngsters for a law-abiding life on their release. The crime and disorder Bill will establish a new detention and training order in place of the current sentences of detention in young offenders institutions and the separate sentence of a secure training order. Detention under section 53 of the Children and Young Persons Act 1933 will remain available for 10 to 17-year-olds convicted of the most serious crimes.
The detention and training order will be made up of 50 per cent. custody and 50 per cent. community supervision, with provision for shortening or extending the custodial element to encourage young offenders to make good progress against agreed sentence plans. Orders will range in length from four months to two years, and young offenders will be placed in the most suitable accommodation for their circumstances.
At the moment, we do not have effective local or national structures to tackle youth crime. The crime and disorder Bill will rectify that, establishing local, multi-agency youth offending teams charged with planning and supervising community interventions. To provide better national direction, the Bill will establish a new national youth justice board for England and Wales, which will ensure consistent standards and monitor local performance. The national board will also set and oversee standards for secure accommodation.
I have spent a good deal of time over the past two years studying at first hand the operation of the youth courts. Over the summer, I visited courts across the country and discussed problems and solutions with all those involved, including young offenders. Despite the obvious commitment of the people working in the system, the unavoidable conclusion is that it is simply not operating effectively. Offenders are rarely asked to account for themselves. They are bystanders in the process, at best bemused by the obscure theatre of the occasion. Parents are not confronted with their responsibilities; victims have no role; and the public are excluded.
I am convinced of the need for fundamental change. For example, we are already encouraging magistrates to allow victims into court to see that justice is done. We will be asking youth court magistrates to use their discretion to lift reporting restrictions following a young person's conviction when that is in the public interest.
I want to go further, and integrate the best aspects of restorative justice into the youth court system. There has been a wide welcome for some remarkably successful schemes that bring young offenders face to face with the human consequences of their crimes. These schemes can bring significant reductions in reoffending. Victims, too, can benefit from this opportunity—if they want it—to tell offenders how the crime has affected them, the innocent parties.
Confronting young offenders with the damage they cause is much tougher than the present alternative. Today, young offenders are spectators in legalistic, adversarial

court proceedings and frequently all they hear is lawyers making excuses for their offending. With the restorative approach, there is no way for youngsters—or their parents—to hide from their personal responsibilities in committing their crimes.
The White Paper proposes a radical new approach for young offenders coming before the youth court for the first time. First-time offenders pleading guilty would normally be referred, after conviction, to a youth panel. The panel would draw up a contract with the young offender and their parents, which could last for up to a year and would tackle the causes of the offending as well as punishing that offending. Under the contract, the offender would be obliged to make reparation. If the contract were broken, the young offender would end up back in the youth court and could be sentenced for the original offence.
Those changes would require primary legislation. The Government will introduce that at the earliest suitable opportunity once the crime and disorder Bill has been enacted and in light of comments in the House and from parties outside it regarding the details of our proposals.
Currently, there is no system of quality assurance to guarantee that legally aided lawyers in youth courts possess the right skills and experience for that work. Moreover, what those lawyers are paid depends on the length of time that they take to complete cases—which, unquestionably, can provide a perverse incentive, and so add to delay and expense.
The Government believe that a better approach might be for lawyers to provide services under block contracts. Such an approach would provide flexibility and a consistently higher quality of legal representation. Such contracts would also discourage delay. Pilot trials will be run by the Legal Aid Board.
Delays in the youth court system impede justice, frustrate victims, and only encourage more crime. A young offender who commits an offence today will have to wait, on average, until the middle of next April to be sentenced. That is wholly unacceptable. No parent and no teacher would wait that long to deal with misbehaviour by their children or by the pupils in their charge. Our first priority is to halve the time that it takes between arrest and sentence for persistent young offenders, to ensure rapid justice for individuals from whom the public most need protection.
Before we came into government, information was not even collected to show how long it took to deal with persistent young offenders. In contrast, over the past few months, we have been collecting such data. I can now tell the House that it takes, on average, 142 days—five months—from the date of first arrest to sentence, during which time the victim receives no justice, and there is neither punishment nor intervention to prevent reoffending.
With the Lord Chancellor, I took immediate action after the general election to combat some of those delays. Provisional data for last month show that the average time to complete young offender cases, once they reach court, is 60 days, compared with 68 days in October 1996. The average number of adjournments also has fallen.
I welcome those improvements, but they can be only a start. In areas that have already introduced fast-tracking schemes, the results are clear. In north Hampshire,


for example, the average time between charge and sentencing for young offenders has dropped from 133 days to 89 days since last October. That dramatic change has been achieved in only one year.
The crime and disorder Bill will provide for fast tracking for all persistent young offenders. There will be mandatory time limits for all young offender cases, and stricter time limits for cases involving persistent young offenders. Time limits will be backed by demanding performance targets. The Bill will also implement many of the recommendations of the Narey review of delay in the criminal justice system, to streamline procedures, improve case management, and so expedite justice for both juveniles and adults.
One of the most depressing things about visiting this country's adult prisons is seeing and hearing how many inmates started offending as children. By nipping youth crime in the bud, we will be preventing today's young offenders graduating into tomorrow's career criminals.
Our manifesto committed us to tackle youth crime and its causes. The White Paper sets out how we will do that. The measures that I have announced should deliver a youth justice system that prevents youth crime and punishes it; deals directly with offending behaviour, rather than simply processing cases; reinforces responsibility; delivers justice for victims and for offenders; and provides value for taxpayers' money. I commend the White Paper to the House.

Sir Brian Mawhinney: I start by thanking the Home Secretary for his courtesy in allowing me to have a brief prior view of both the White Paper and his statement. He knows that I have not yet had time to study the White Paper, but I was grateful for the opportunity to read it.
I know that the Home Secretary will accept that Members in all parts of the House are concerned about high levels of crime committed by young people under the age of 18. Such crime is damaging to the community, but, far more important, it is damaging to the young people themselves and to their families. Most hon. Members agree that, overwhelmingly, such young people need to focus on the difference between right and wrong and that they do know the difference but choose to ignore it in their behaviour patterns. The Home Secretary will have no difficulty with the part of the Bill that deals with doli incapax.
Like the Home Secretary, we accept the principle of parental responsibility. Indeed, he will have noted that our manifesto stated that, if we were re-elected, we would introduce parental control orders, which sound similar to the ideas that he has outlined today. We also accept the principle of partnership—the Home Secretary's youth offending teams sound similar to the child crime teams also proposed in our manifesto. Does the Home Secretary accept that there is a broad similarity of approach even if, as we will no doubt discover when we debate the Bill, there are differences of detail?
Does the Home Secretary accept that not only do parents have responsibilities but society has a responsibility, and that adults must set standards that are good templates of behaviour for young people, rather than the opposite which is too frequently the case?
We will support any and all measures in the proposed Bill that will fairly and effectively help to reduce the level of youth crime, but I have some detailed questions for the

Home Secretary. What are the measures that he envisages will "break the habit", as mentioned in paragraph 3.11, of young people who are addicted to alcohol and drugs?
Will the Home Secretary consider a form of parenting order based on truancy which, as the White Paper correctly states, is an indicator of subsequent criminality? In many cases, parenting orders after the criminal conviction may be too late to be effective. Paragraph 4.11 talks about parenting orders being made against parents who have been convicted of failing to send their children to school, but this is a different matter which I hope the Home Secretary will consider.
Will the Home Secretary be cautious about encouraging the use of local authority care proceedings in the event of the failure of child safety orders, given that the local authorities' record in terms of children in care and offending is—I will be delicate—doubtful?
The White Paper and the statement contain several references to correcting or addressing the "causes of offending"—as in, for example, paragraph 5.19 of the White Paper. Does the Home Secretary accept that he has to decide whether he believes in personal responsibility, as he suggests by, for example, wanting to replace doli incapax, or whether young people who offend are somehow doing something that they cannot avoid doing because they are overwhelmed by circumstantial forces? He will have the whole House with him on the first interpretation. When we debate the Bill, I hope that he will be a little more precise about dealing with the causes of crime.
Why does the Home Secretary believe that 17-year-olds should be offered the incentive of release earlier than the courts have determined, but that 18-year-olds should not have a similar incentive? Who will assess the risk to the community in these early releases? I have asked the Home Secretary twice before, and now give him another opportunity to tell the House, whether young offenders under the age of 18 are to be included in the tagging proposals that he announced to the House a little while ago.
How many new jobs will youth offending teams they entail? How many existing jobs will they replace, in what areas, and what will be the cost? Will parenting orders be served on parents who do not have custody of the young people as they live apart?
Does the right hon. Gentleman accept that the Opposition welcome the practice of restorative justice, but will he guarantee to the House that victims of crime will have a final say on whether they wish to meet or have anything to do with those who offended against them?
What obstacles in the magistrates court rules— mentioned in paragraph 9.6 of the White Paper—does the right hon. Gentleman want to remove? Will he refute suggestions that he will fine police forces if he thinks that they are acting too slowly?
I realise that I have asked a number of detailed questions, and I should be grateful if the Home Secretary would write to me on those that he is unable to deal with today.
In government, we showed that we recognised the importance of continuing to press down on youth crime and, where practically possible, to create circumstances that reduce the temptation to offend. I assure the Home


Secretary that we will bring the same constructive and responsible attitude to the consideration of the crime and disorder Bill when it appears.

Mr. Straw: I am grateful to the right hon. Gentleman for his constructive response to my statement. I hope that he will take it as something of a compliment when I say that those of us who spent years in opposition debating these issues from that side of the House—the right hon. Member for Berwick-upon-Tweed (Mr. Beith) is still in the same place, and he remembers those debates—now recognise an altogether different approach by Conservative Members. The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) argued with anyone who opposed him, even about what time it was, as well as about issues such as crime and punishment. I should much prefer that the whole House was united on that issue, and I will forbear to mention the previous Government's record over 18 years.
I accept what the right hon. Gentleman said about the importance of responsibility and the fact that society—I commend him on his use of that word—has responsibilities. I look forward to many more occasions on which the word society and the idea of community that it embraces are used by Opposition Members. He asked 11 questions and I shall rattle through them as quickly as possible.
The right hon. Gentleman asked about our proposals to break the link between crime and drugs. A large part of what we are proposing in respect of youth crime is to do with the fact that perhaps 60 or 70 per cent. of the youngsters who come before the courts have some sort of drug habit, so that is woven into all our approaches. We are also proposing the drug treatment and testing order to try to break the vicious circle between drugs and crime. Much of the intervention that is involved at the final warning stage, the youth court stage and when youngsters are committed to custody, is about breaking that drugs habit.
The right hon. Gentleman asked an important question about whether the parenting order could be used as an enforcement for parents who are keeping their kids out of school. The answer is yes. We tried to cover that in paragraph 4.11 of the White Paper, but if he feels that we have not dealt with it adequately, we shall be happy to hear his representations.
It is fair to say that the majority of local authorities deal with care proceedings very sensitively. It is the abuses that we hear about, and it is important that more control is exercised there. However, the final sanction for people who do not face up to their responsibilities as parents is for the state to intervene as parent. I can think of no other final sanction. I wish that it did not have to be used, but sometimes all of us have to accept that the state, through the local authority, must step in and remove parents' rights because they are not accepting their responsibilities.
The right hon. Gentleman asked about the causes of offending. The Labour party and I are committed to the notion of getting youngsters to acknowledge that, if they steal from a shop, they have committed the theft and not some extraneous forces. That has to be the only way in which we can run a justice system. Set against that, we must recognise that external factors may tempt

youngsters into that condition. There is no contradiction there. Indeed, it was the right hon. and learned Member for Rushcliffe (Mr. Clarke) who said that the best answer to young adults who commit crime was to provide them with jobs. He was not diminishing their responsibility for their crimes but suggesting a constructive way to get them away from crime.
The right hon. Member for North-West Cambridgeshire asked about early releases for under-17s. There is bound to be some difference in the detention regimes for under-18s and over-18s. We think that it is worth building some incentive into the detention and training order for young people subject to detention to ensure that they go straight at an earlier age. If they break their release conditions, they can be taken straight back into detention. Electronic tagging will apply to 16 and 17-year-olds in the Prison Service, which includes those in young offenders institutes.
The right hon. Gentleman asked about the number of new jobs that are likely to be created, and the overall cost. The overall cost for the package is estimated at £22 million, which is relatively small for the changes that we are making. Over time, we hope that it will be offset by savings. If we can get the delays down, we can save money. I do not in any sense regard the establishment of young offender teams as an opportunity for job creation in the local authority sector. It is about making better use of existing agencies and resources, although there may have to be some expenditure changes at times.
The right hon. Gentleman asked whether parenting orders should be available for parents who do not have custody. They should be available for parents with care and control. If parents have no involvement in the upbringing of the child, the idea is redundant.
Should victims have a final say on whether they are to be involved in the process? Unquestionably, it should be up to the victim to decide whether he or she wishes to be involved. The examples of restorative justice that I have seen suggest that victims want to be involved and just want the person who has committed the crime to say sorry. Often, that is enough, but getting that out of a youngster under the current system is difficult.

Mr. Chris Mullin: May I put it to the Home Secretary that the measures that he has announced will be especially welcomed by those parts of our community where law-abiding people's lives are made miserable by out-of-control youths? Will he confirm—he touched on this earlier—that the strategy is not meant to be seen in isolation, and that the best way of stopping youngsters going into anti-social activity is to provide them with a purpose in life? That requires investment in sports facilities, training and education, and, ultimately, in getting them into work. What progress has been made on setting up secure training units, a subject much announced by the previous Government but on which we have not so far seen results?

Mr. Straw: I am grateful to my hon. Friend for those questions. He is right about the importance of giving youngsters a purpose in life. This morning, the Prime Minister and I saw the excellent mentoring programmes run by the Dalston youth project in Hackney, which deals with young offenders. To pick up a point made by the right hon. Member for North-West Cambridgeshire, it is


about getting youngsters at risk of drifting into offending away from crime at an early stage and providing them with mentors—adults who are willing to give them advice and guidance. One of the terrific things that mentors told us was that it has not only been important to youngsters subject to it but added something to the lives of those who provide it.
I have already announced the establishment of a secure training unit at Cookham Wood. The contract for that has been let, and it should be running next year. I have agreed to have a competition for the contract for the other four, which will all go ahead.

Mr. A. J. Beith: We welcome the emphasis on prevention and the new statutory duty, but does the Home Secretary recognise that the agencies with most to offer, especially the youth service, are under the greatest threat from local government cuts?
In a paper endorsed by Sir Stephen Tumim last year, we called for the less adversarial youth justice system that brings together offenders, families and victims. We warmly welcome the steps that the right hon. Gentleman has announced in that direction. Does he accept the Audit Commission's recommendation that savings achieved by improving the youth justice system should be ploughed back into prevention projects and positive opportunities for young people?
Does the right hon. Gentleman accept that, while it is right that the courts should have the power to ensure that young offenders can be remanded in secure local authority accommodation, 15-year-olds should never be sent to adult prisons? If they need to be detained, it should be in accommodation suitable for their age group.
Does the Home Secretary recognise that some measures, especially the curfews, in this generally useful package look a little like gimmicks, and that even the parenting orders will not work if the problem is criminality in the home background or if parents are at their wits' end, having tried everything to stop their youngsters offending? It would be a pity if gimmicks obscured the good features of the package of proposals that he has announced.

Mr. Straw: I am grateful for the two cheers from the right hon. Gentleman. Of course, it is de rigueur for a Liberal spokesman—it is always a man, by the way— to call for more spending. He never says where it is to come from.
My answer to the right hon. Gentleman is to refer to the Audit Commission report. It pointed out that more and more was being spent on dealing with fewer and fewer offenders. We are spending £1,000 million. I have accepted the need for some more spending, which should be carefully targeted, but the existing system is not only ineffective and replete with delays but inefficient. We have to get people working together. The reason why it is important to have a single statutory aim for everyone is that we must ensure that they are all focused on the common objective of reducing offending.
For example, social workers believe that their objective is the welfare of the child and that the welfare of the child is not necessarily dealt with by punishing the child. That is not a view I take, but it is their view. We have to break that view.
The right hon. Gentleman said that 15-year-olds should never be sent to prisons. I greatly regret that adult prisons have to be used for 15-year-old boys. We intend to ensure that they are not used for 15-year-old girls. My hon. Friend the Member for Gateshead, East and Washington, West (Ms Quin), the Minister responsible for prisons and probation, has already announced a series of major improvements in the way in which 15 and 16-year-old boys will be dealt with within the prison system. We shall set up new regimes specifically for them in the light of the report of the chief inspector of prisons.
The right hon. Gentleman described the proposals for curfews as gimmicks. If he had been to the places that I have been to, such as Yardley in Birmingham, Redditch, and Hamilton in Scotland, and many other places where young children under the age of 10 are out at 11 or 12 o'clock at night without adult supervision, he would not think that curfews were gimmicks. He would think that they were sensible and straightforward, and would wonder why they had not been imposed before.

Ms Joan Walley: I welcome the proposals that my right hon. Friend has brought to the House. May I draw his attention to the work of the Burslem youth consultative panel, which has just reported on offending and what young people want? My right hon. Friend talked about how different agencies came together. Will he look at crime prevention? If the views of young people can be brought in at local level through the Burslem youth consultative panel, perhaps we can learn nationally from the work that the panel has done.

Mr. Straw: I will certainly take that on board. I do not have direct knowledge of the consultative panel to which my hon. Friend refers, but I know of some others. I know that excellent results have been achieved. Where young people are brought in and offered responsibility, they typically take it with open arms.

Mr. Andrew Rowe: The right hon. Gentleman knows as well as anyone that in many cases one of the root causes of offending among young people is the fact that they have no self-esteem outside that provided by their peer group. Does he have any proposals to ensure that some of the gangs that roam the streets are directed towards more constructive purposes? It can be done. There is no doubt that the areas in which such gangs rampage suffer most from their activities. It is interesting that, almost without exception, those at a national conference of gang leaders in the United States asked for some way of getting themselves back into the legitimate system.

Mr. Straw: The hon. Gentleman is entirely correct. On visits to young offenders institutions and adult prisons, once one has cut through the bravado, one sees young people who lack any sort of self-esteem and often lack much in the way of formal education. That is why, despite the Prison Service's best efforts, the number of suicides in prison remains at a worrying level. Youngsters who, outside, would have been cocky beyond belief get inside and realise that they have thrown their lives away.
The hon. Gentleman is right to say that programmes aimed at targeting some of those youngsters and moving them away from criminality can be effective. There is a project in my constituency in exactly the sort of area he


describes: it is highest crime area in the constituency, and the poorest area. It also has the highest levels of unemployment. A project called Youth Works has specifically targeted four or five known young offenders; that work has helped those young offenders, but—much more important—it has ensured that the level of property crime has dropped dramatically. The costs to one of the housing associations of repairing houses has been reduced from £400,000 to £100,000 in a year.

Dr. Brian Iddon: I welcome the Home Secretary's statement today and I am sure that my constituents will, too. However, I am sure he is aware that social services departments across the land are expressing concern about an increasing minority of young offenders being placed in expensive secure accommodation. Will he comment, if not today, on a future occasion, about the resulting increase in costs, for which social services departments cannot budget?

Mr. Straw: There is a problem with social services secure accommodation, because it costs more than £2,000 a week, whereas a place in a young offenders institution costs a quarter of that, at £500 a week. One reason for setting up the national board for youth justice is to ensure much more effective planning and management of the secure estate, and, as part of the comprehensive spending review, we are conducting an audit of such accommodation. Although we have to maintain high standards of quality in secure accommodation, there must be opportunities for savings—after all, it costs £100,000 a year to keep one youngster in such accommodation— and we hope to achieve that. We are also looking at the charging arrangements.
I also say to my hon. Friend that the problem with the current situation is the young offender who simply cannot be remanded in custody and who, for months and months, commits scores—sometimes hundreds—of offences while on bail. When that young offender finally gets put into secure accommodation, everyone breathes a sigh of relief, but, typically, by that stage the habit of crime is ingrained, so the overall cost to the public purse will be much greater. If we can get that small hard core of persistent offenders into secure accommodation earlier, we may be able far more effectively to do something for them and for their victims.

Mr. Nick Hawkins: The Home Secretary is well aware of my long-standing interest in the subject of youth justice from the number of times I have raised it in the House. I welcome much of what he has announced, but will he deal specifically with a number of questions?
First, on the issue of restorative justice, does the Home Secretary intend to issue some guidance to chief constables to reinforce what he said to my right hon. Friend the Member for North-West Cambridgeshire (Sir B. Mawhinney) about victims being given the final say on whether to meet the perpetrators of crime? That relates particularly to elderly people, because pensioners may be unwilling to meet those who have committed crimes—indeed, to be confronted by young offenders may be the last thing they want.
Secondly, will the Home Secretary agree to publish in due course the legal advice that he and the Lord Chancellor have been given on the question whether the proposals in the White Paper—especially those relating to the abolition of doli incapax—will be acceptable in European law? I worry that the Government's proposals to import the European convention on human rights into United Kingdom law may cut across some of the things the right hon. Gentleman is trying to suggest in the White Paper.
Finally, in response to my right hon. Friend the Member for North-West Cambridgeshire, the Home Secretary suggested that Conservative Members had changed their attitude. I should point out that many Conservative Members have been campaigning for many years for tough measures to be taken against young criminals, especially repeat offenders.
Will the right hon. Gentleman accept that, when the Minister of State, Home Office, the hon. Member for Cardiff, South and Penarth (Mr. Michael), who was in the Chamber earlier, was opposing what became the Criminal Justice and Public Order Act 1994 through 180 hours of Committee debate, the Labour party was opposing our tough measures? Does he accept that his change of attitude, which has been so brilliantly satirised on television over the past few days by Messrs. John Bird and John Fortune, shows that it is the Labour party which has been brought to agree with us?

Mr. Straw: I know that there are many more opportunities for watching television in opposition than in government and I am afraid that I missed Mr. Bird and Mr. Fortune; I shall have to get a tape out of the Library.
The Minister of State has done sterling work and no one has been more energetic in fighting crime and trying to shift the policy towards crime prevention. He has left the Chamber because he is addressing the annual general meeting of Victim Support in my place. I hope to go to the meeting after the statement and I shall tell those present that, of course, victims have to have an absolute right to determine whether they are involved in the process. The explicit answer to the hon. Gentleman's question is: yes, we shall issue guidance, as he requests.
The hon. Gentleman will know that, for good reasons, it is never the practice of Ministers to publish legal advice that they have received either from the Attorney-General or from their legal advisers. We are convinced that our proposal to remove the concept of doli incapax is fully consistent with the European convention on human rights. Interestingly, there was a period in the divisional court— when C v. the Director of Public Prosecutions set the law—when doli incapax was effectively abolished. That did not lead to injustice for young offenders, but made for a little more efficiency.

Mr. Gerald Bermingham: My right hon. Friend mentioned publicity in respect of certain types of juvenile crime, which causes me some concern. Perhaps he will take on board the concerns that I and many others in the profession have that such publicity can create heroes as well as portray villains. Does not any publicity have to be approached with great caution?

Mr. Straw: It does, but I also think that communities have a right to know, particularly about older


young offenders such as 15, 16 and 17-year-olds. Some young offenders who are dealt with by youth courts are over 18 when they come up for sentence, and the public have a right to know the identity of offenders in that age group—as well as that of some of the younger offenders. It would go against the European convention on human rights and the United Nations convention on the rights of the child to require the names of children accused, but not convicted, of offences to be made known—and I do not support that.
In many cases, it is right for the names of the accused who have been convicted to be made known. I do not think that that will make them into heroes, but we must introduce an element of shaming people. There is nothing wrong with that—it is what kept many of us in check when we were at school; it is an important element of social control, which is what we are about.
Another problem is that the youth courts have retreated into what I have described as a secret garden and have become secret and unaccountable; too few people have known about them. That has reinforced their inefficiency and ineffectiveness.

Mrs. Alice Mahon: I welcome many of the measures that my right hon. Friend has outlined, particularly the one involving working with parents and having parents at counselling sessions. Does my right hon. Friend accept that a disproportionate number of young offenders have spent a large part of their lives in care? Obviously, they are emotionally damaged; they have often been abused and feel alienated. Will my right hon. Friend work with other Departments to try to introduce special measures to help that group of vulnerable young people, and to try to divert them from crime and show them that the rest of society cares?

Mr. Straw: Yes is the answer to my hon. Friend. She has raised a very important point. The high proportion of youngsters from care who are locked up at 15, 16, 17 or 18 is depressing. It is a serious comment on the nature of residential care provisions for young people. My hon. Friend will know from the Secretary of State for Health's statement following the Utting report that we take the subject extremely seriously. We have to raise the standards of residential care for children, particularly those who are most vulnerable.

Mr. Richard Allan: Does the Secretary of State share my view that the tradition of policing by consent is extremely important in this country and that it is a matter of great concern that many young people come into contact with the police only in a crisis when they are already committing crime? Does he have any plans to enhance the police's community role so that they have more contact with young people before those youngsters commit crimes, and, therefore, see them in more co-operative circumstances?

Mr. Straw: The police are doing a great deal in many areas to improve their connections with local communities. These days, being community police officers is no longer seen by police colleagues as a slightly eccentric task for those who have been put out to grass, but as part of police officers' core activities.
I have gathered from visits around the country that police officers are often involved in youth work. For example, in one town in Norfolk, a police constable

dealt with a minor epidemic of youth crime by establishing a youth club in the area. That is one of many good examples of community policing. Let us not forget that the police run attendance centres, which are much neglected, but are often as effective as, if not much more cost-effective than, dare one say it, some activities run by social services departments.

Mr. Ronnie Campbell: My right hon. Friend has announced that at least 60 per cent. of young offenders are drug takers, which is a worry, particularly in my constituency where young kids on drugs have got into crime. When they are sentenced, get bail or whatever, they have to wait three, four or five months before they are detoxed. All the time that they are still on drugs, they cause havoc. Has my right hon. Friend any answers to the problem of how to get those kids through the detox treatment and back on the right road? I am aware that not all of them go back on the right road and that many of them, having been detoxed, go back on to drugs, so I know that it is not an easy task.

Mr. Straw: First, I pay tribute to my hon. Friend for the work that he is doing in his area and more widely in respect of young drug addicts. I have visited his constituency and seen that work. We are extremely concerned about the problem, and I do not pretend that there is an easy answer, because the demand for detoxification outstrips the supply.
We believe that there could be a more efficient delivery of services and better co-ordination between some of the drug action teams. That is one reason, out of many, why we are beefing up the national drug action strategy with the appointment of Keith Hellawell, the former chief constable of West Yorkshire, as the anti-drugs supremo and Michael Trace as a deputy. He comes to the task with a different experience; Hellawell has the background of a police officer, whereas Trace has the background of someone who has dealt on the front line with drug addicts in prison. Both will be able to advise the Government on some imaginative improvements to the current system.

Mr. Bob Russell: When the Home Office ministerial team is considering the causes of crime and being tough on crime, does it have discussions with other parts of government? Does the right hon. Gentleman agree that national youth organisations have a critical part to play in tackling the problems of youth crime? If so, would he care to comment on a written answer that I received this afternoon which says that the cadet forces of this country have had their budgets cut by £2 million in the current financial year? Will that help or hinder the policies that he set out in his earlier remarks?

Mr. Nicholas Soames: Disgraceful.

Mr. Straw: In answer to the hon. Gentleman's first question, we discuss such matters with other Departments. I chaired a ministerial group that dealt with youth justice and provided ministerial input into our proposals. In addition, my senior policy adviser, Norman Warner, a former senior official and director of social services in Kent, has been chairing a youth justice task force which has involved practitioners from everywhere.
As for the written answer that the hon. Gentleman has received, he will know that we are working within the budgets set by the previous Administration, so I suggest


that he directs his question about those cuts at the hon. Member for Mid-Sussex (Mr. Soames) who is sitting along the Bench from him.

Mr. Ian Cawsey: Does my right hon. Friend agree that major contributions to youth crime include truancy and suspension, particularly the use of indefinite exclusions from schools? What action will he take to deal with those specific issues?

Mr. Straw: My hon. Friend is right. Unquestionably, if a child is truanting—especially if he or she is then permanently excluded from school—there is a very high risk of that child offending.
Some children have to be excluded from school, but unquestionably many schools are permanently excluding too many youngsters, and it is too convenient for them to do so. I join my right hon. Friend the Secretary of State for Education and Employment—with whom I have been discussing this crucial issue—in saying that schools must examine their internal procedures to try to reduce the number of youngsters who are excluded. In the case of the hard core of youngsters who are excluded, local authorities and schools must ensure that good arrangements are made to provide them with education and other interventions during the period when they should have been at school.

Mr. Desmond Turner: Nowhere will the Home Secretary's statement be more welcome than in my constituency, where these problems rank very highly. However, I should be grateful if the Home Secretary would be more specific about the way in which he envisages the use of local authority secure accommodation, not only because of the cost implications, which have been mentioned, but because of the scarcity of such accommodation. To the best of my knowledge, Hampshire, Sussex and Kent between them have available 14 such places, which are already being fully used under the present regime. There is a problem not only of cost but of supply.
I should be grateful if the Home Secretary would elucidate the criteria that will be used to determine how places are used, and what measures he would propose to expand them, because obviously more will be needed.

Mr. Straw: Some more local authority secure accommodation is coming on stream. In previous Parliaments, there was agreement between the parties on the principle that more was needed, and a scheme was established in 1991 to bring more on stream. It is now producing about 200 extra places, which is quite a high proportion.
The problem is partly one of supply and cost, but it is also a question of organisation. There is no effective co-ordination of the current arrangements, and the charging regime can cause local authorities not to use secure accommodation when they should do so. That is why we are establishing the national youth justice board and giving it the responsibility for carrying out an audit of accommodation and for ensuring its proper co-ordination and perhaps its management.

Computers (Century Date Change)

The Chancellor of the Duchy of Lancaster (Dr. David Clark): With permission, Madam Speaker, I should like to make a statement on how Government Departments and their agencies are tackling the millennium compliance problem—sometimes called the "millennium bomb"—within central Government Departments and their agencies.
The problem is widely understood to pose serious and potentially catastrophic hazards in all organisations, in both public and private sectors, in every country worldwide. It affects mainframe and personal computers and any device containing a microprocessor chip that manipulates dates. That includes telephone equipment, lifts, air conditioning, lighting, clocks, timers and control equipment.
Checking and, where necessary, correcting every system is a detailed, laborious process, and there is a fixed deadline for its completion. My right hon. Friend the President of the Board of Trade is leading efforts to raise awareness of that urgent problem throughout the private sector.
The principal responsibility for ensuring that systems are millennium compliant rests with individual Departments. They are also responsible for ensuring that organisations in the wider public service sectors that they sponsor have the necessary guidance and information. My role is to co-ordinate activity in central Government, assess progress and provide guidance. The Central Computer and Telecommunications Agency in my Department has produced comprehensive guidance for Departments on how to deal with the problem. That is available publicly.
Immediately after taking office, I asked to receive, as soon as possible after 1 October, detailed and costed plans, showing how Departments and agencies were tackling the problem. My officials have now analysed those plans. On the basis of those plans, I am now able to confirm that all Departments and agencies have work in hand and scheduled for completion in time—many by December 1998, a majority by March 1999 and a small number later in 1999. Some Departments will in general give priority to correcting business-critical systems, and may leave systems of minor importance until later.
The total estimated cost set out in the plans is just over £370 million. Most of it will be spent in the current and next two financial years. That is less than some estimates, but is based on careful calculation by Departments and their advisers, and I have no reason to believe that it is not of the right order, but that is something that other Ministers and I shall monitor carefully.
The Government's policy is that the cost will be met from within planned allocations, and the evidence from the plans is that almost 97 per cent. is so covered. Many costs will be accommodated in maintenance and system replacement budgets. In some cases, Departments will bring forward investment plans and adjust their priorities.
Guidance published by CCTA asked Departments to consider whether staff shortages would inhibit progress. The plans as a whole do not suggest that that is a serious problem at present, but I shall keep a close watch on that and have already written to Departments asking for further clarification. I shall ensure that that will be covered specifically in subsequent reports.
Overall, my assessment is that we have established the measure of the problem and set in hand plans which are realistic and achievable, but the bulk of the actual remedial or replacement work is yet to be done, the timetable is tight and there is little margin for error. That is the challenge. The programme needs continuous monitoring, and I shall be checking progress regularly and reporting to the House on a quarterly basis, starting this spring.
It is also my intention that we should be open about the scale of the problem and our progress in dealing with it. I am therefore arranging for all the departmental reports to be placed in the Library of the House and published on the internet; and I shall ensure that progress reports are also made available on a regular basis.
Finally, I can announce today that we are reinforcing and strengthening our effort in two significant ways. First, a ministerial group is being set up, under my right hon. Friend the President of the Board of Trade, to drive forward action to tackle the year 2000 problem across the public and private sectors. I shall be a member of that group, chairing a sub-group which will co-ordinate and drive forward the action for which central Government Departments and agencies are responsible.
Secondly, we have asked Don Cruickshank, the chairman of Action 2000, to reinforce this effort across both public and private sectors by keeping in close touch with the ministerial group and advising on best practice from the private sector. I hope that that demonstrates the seriousness with which we take the problem, and the vigour of our approach to it. Those efforts will be maintained.

Mrs. Cheryl Gillan: I start by welcoming the Chancellor's statement on millennium compliance—it is not before time. However, many listening to his statement today will have been disappointed. There remain many unanswered questions, which I hope the Minister will now cover.
The Minister has done little today to engender confidence in his handling of the matter. He appears once again to have set up yet another committee chaired by a Minister who is rarely in the Chamber; and he appears to have saved a little money.
The timetable that we set when we were in government seems already to have slipped. Our deadline for all Departments to be compliant was December 1998. The right hon. Gentleman tells us that a small number of Departments will not complete the work until later in 1999. Can he tell us when in 1999? Why is he leaving matters until the eleventhth hour? Which part of the Department of Social Security will not become compliant until the end of August 1999? What minor matters can be left until we are right up against the wire?
Will the right hon. Gentleman give us a date by which all Government systems will be compliant? That is most important. A date for all Government systems has not been given today.
The right hon. Gentleman has glossed over the problems by announcing yet another ministerial group. He has not concentrated on the shortages of staff skilled for this exercise. What estimate has he made of the number of IT specialists and workers that will be required? Is he convinced that we have enough IT-skilled personnel available in the United Kingdom? I have talked

to some companies that are already finding a shortage of skills in the United Kingdom, and are contracting with companies as far afield as India. Does the right hon. Gentleman have any contingency plans to cover any shortages that he may find?
To what extent are the Government refusing to deal with non-government organisations and suppliers that are not already millennium compliant? If the Government are dealing with non-compliant organisations, will the right hon. Gentleman set a date beyond which they will cease to deal with such companies? That has been the case in the commercial world with companies such as British Telecom.
The right hon. Gentleman has been less than frank on costs. He said that the costs are less than some estimates, but we need to be convinced on the detail. In the schedule attached to the statement, he surprisingly estimates that the compliance costs for the NHS will be only £6 million, whereas the costs for social security will be £45 million and those for defence will be £200 million. The statement on the Department of Health contains the phrase "excluding embedded systems". Will he tell us the cost of bringing into account, for example, the embedded systems, because there will be problems with, among other things, defibrillators and heart monitors in the health service?
There has been no mention of local government. What steps has the right hon. Gentleman taken to ensure that local government systems will be millennium compliant? Will extra grants be available to councils, and what will be the total cost to local government?
Is the right hon. Gentleman convinced that the Government are doing enough with their awareness programme? How does he react to the Cap Gemini survey, which is detailed in early-day motion 497? The survey shows that 29 per cent. of gross domestic product will be at risk, but if the timetable slips by another three months, the figure will be 37 per cent. Does he agree with the Midland bank survey, which estimates that one in five companies could fail?
How will the right hon. Gentleman deal with the problems of the European Commission, particularly in the light of the answer from the Minister in the Department of Trade and Industry that the Commission has produced no guidelines on millennium compliance? Does he know what steps are being taken by European organisations, and how much will it cost? Surely there will be a serious problem if plans in Europe are behind even our own.
Does the right hon. Gentleman agree that millennium compliance is unavoidable, but as it comes at the same time as Euro-compliance, it presents our organisations and businesses with the greatest IT task ever faced by government and industry? Perhaps he will now realise that, although we cannot put off millennium compliance, we could put off joining the single currency. Should not joining the single currency be postponed?
Is the right hon. Gentleman convinced that all computers that are being sold, including those sold to Government Departments, are millennium-compliant? I do not want to put people off buying computers, but how will the Government ensure that suppliers of computer equipment have checked that their stock is millennium-compliant? Does he appreciate that this is not just a technical problem? What steps has he taken to


investigate all contracts, licences, stationery and manual processes? How will he ensure that all guarantees on computer equipment are honoured?
If the Government are asking organisations to certify their millennium compliancy, as I presume they are, how will the Chancellor of the Duchy confirm their compliance? What form will that process take? Even if organisations certify, how will the right hon. Gentleman ensure that their critical systems are indeed compliant? Will he set up a testing system, and if so, what form will it take?
What contingencies does the Chancellor have in place in the event of failure in any testing process or any eventual millennium disasters? Will the right hon. Gentleman give us the details now? If not, will he give us a date by which he will have contingency plans in place?
The year 2000 and the century date change probably constitute one of the most complex and threatening problems that we shall ever face. A time bomb is ticking away inside computer systems whether they are the largest mainframe computers or software embedded in domestic appliances. The possible effect of problems may vary from something that is slightly annoying to something that is a major threat to business, people or the environment, especially in the event of failure of critical safety systems. Will the Chancellor please reassure me and the rest of the country that he has understood the magnitude of the problem and commands the detail of the solution? If he does not, I am not sure that the right hon. Gentleman will last in office until the millennium.

Dr. Clark: I agreed with the hon. Lady only when she described the millennium problem as complex and complicated. I wish that she had not trivialised it. By her cavilling and dislocated series of questions, she showed that she does not begin to appreciate the nature of the problem. Before the hon. Lady jumps in and makes such outrageous statements, I advise her to go to the Library of the House to look up the departmental reports that I have deposited there, or she can read them on CD-ROM or turn to the internet.
There are 1,200 pages of reports from the Departments for the hon. Lady to analyse. My officials and I have spent considerable time analysing all those reports, and we are confident that we shall be millennium-compliant at the appropriate date.

Mr. Michael Fallon: When?

Dr. Clark: The compliant time and date is midnight on 31 December 1999. It is as clear as that, and there can be no slippage. I am sorry that I had to spell it out to the hon. Gentleman, but I know that he is not as numerate as he could be.
We are keen that we in the public sector and those in business can work together because it is not viable for one sector to be millennium-compliant and the other not. We obviously need an interface.
The hon. Lady talked about skills. I sometimes wonder where she and her colleagues have been over the past 18 years. There is a shortage of people with computer skills, and training takes time. I remind the hon. Lady that we have been in office for only seven months and that it

was her Department which failed to match up to training people in computer skills. It was her Government who set a deadline for millennium compliance, but they did nothing else. They did nothing within the Department to prepare for that.
In the same month as I took office, I looked at the books and found that practically nothing had been done. I then wrote to all my ministerial colleagues—this was in May—asking them to prepare reports. That they did, and I have placed the reports in the Library.

Mr. Rhodri Morgan: May I express the gratitude of the House to my right hon. Friend the Chancellor for making this statement? It does not underplay the seriousness of the issue, which is beginning to assume the epoch-making significance of the switchover from the Julian to the Gregorian calendar in 1720, or whenever it was. Indeed, if we went back to the Julian calendar, we might avoid the problem altogether. I do not know whether that is really the case.
My right hon. Friend's statement is important because it emphasises that the millennium will affect more than the banking and finance industries, along with the private computer industry. It will have an effect also on things such as life support machines in hospitals, surgical equipment and our own domestic television sets. Would my right hon. Friend welcome a report by a Select Committee—not necessarily the one in which he and I have a special interest—to reassure the House and the public that the Government, including my right hon. Friend's Department, are being kept up to the mark on that important issue?

Dr. Clark: The Government have no plans to go back to the Julian calendar—I am sorry to disappoint my hon. Friend.
We want to be as open as we can with information and, as I have said, we have published all the reports from Government Departments for people to see. If my hon. Friend—he happens to be a Chairman of a Select Committee—and his Committee want to look into those matters, my Department will give him any and every assistance. The House and the country need to be involved in the issue, and the more who are involved, the better.

Mr. Malcolm Bruce: I welcome the Chancellor's statement, which is one for which I have been asking. In opposition, the Labour party was critical of the previous Government's timetable, yet their timetable seems to have slipped behind that of their predecessors.
The right hon. Gentleman's answers seem to be inconsistent with the written answers that I have been receiving. Why, for example, did he issue a statement on 12 November stating that no deadline for tackling this serious problem had been missed, when answers to me show clearly that only three of 16 Departments could confirm that they had met the January 1997 target date?
Why did the Chancellor make a claim about receiving costed and privatised plans as soon as possible after 1 October, when the agreed date with the National Audit Office was completion by October? It is clear from parliamentary answers to me that only seven of 16 Departments could say that all their areas had met the October deadline. How can the right hon. Gentleman explain those inconsistencies?
I am puzzled by the Chancellor's claim that he has covered all aspects of Government and public body responsibility. He quotes a figure to which the Conservative Front-Bench spokesperson, the hon. Member for Chesham and Amersham (Mrs. Gillan), alluded—the £6.1 million for the national health service. Labour Members have observed that we are talking about life support systems and every trust in the land. Is the right hon. Gentleman really asking us to believe that £6.1 million will resolve the problem for the NHS? Will the cost not be hundreds of millions of pounds?
Will the Chancellor explain how he will ensure that all the public bodies outside the central Departments are complying? It is difficult to believe that £370 million is the definitive cost. Experts who have commented on those matters will find £370 million a bizarre figure. They are suggesting costs amounting to billions of pounds. The gap is huge. The right hon. Gentleman has said that, of £370 million, £200 million can be identified for the Ministry of Defence alone. Is he suggesting that that Department can absorb that cost without any consequential cuts in its budget?
It is an extraordinary statement if we are led to believe that the Chancellor of the Duchy of Lancaster has everything under control and covered and that there will be delivery on time. Is the right hon. Gentleman's statement not inaccurate on deadlines? Is it not incomplete about costs and is it not insufficient on how costs will be met? In those circumstances, is the right hon. Gentleman not complacent to suggest that the Government have the matter under control? Will that phrase not come home to haunt him?

Dr. Clark: As far as we are aware, no other Government have undertaken the exercise that we have carried out and published all information for their citizens to see. The hon. Gentleman has taken a particular interest in these matters over the years and has a serious contribution to make in trying to solve the millennium problem, which is not party political but one that affects us all, public and private. It is also a global problem. I urge him not to fall into the trap of accepting the words and figures of the hon. Member for Chesham and Amersham (Mrs. Gillan), who leads for the Conservatives on this. She quoted the figure of just over £6 million for the national health service. That is not the figure for the NHS, for which I have no responsibility and for which I am not speaking. I am responsible for central Government Departments, and the figure of £6 million relates to the Department of Health.
The hon. Gentleman questioned me about a general series of figures. He produced his own figures, in which he estimated that the total cost of the Government's millennium computer problem was almost £1 billion. That of course includes local government, the national health service and various other bodies. The £370 million, which I estimate is the cost of central Government's compliance, is in line with his estimate. We do not know whether his figure is right, but we think that his general ballpark figure is probably about right—that the cost for the public services will be about £1 billion.

Dr. Stephen Ladyman: I am grateful to the Minister for his statement. As a former information technology manager with perhaps a little expertise in this sector, I should warn him that, as the systems for which

central Government are responsible are so complex, plans to complete the work in time for the end of the millennium should have been drawn up probably in 1995. I wonder whether he could remind me who was in government in 1995 and suggest why they never took responsibility? The hon. Member for Chesham and Amersham (Mrs. Gillan) said that the Conservative Government had plans for completion of all systems by early 1998, but those plans will not be completed until the end of 1999, and that slippage did not take place in the past six months. I wonder why they did not deal with the slippage at the time.
My main point is this. Will the Minister clarify his statement on auditing plans and how they progress? What plans does he have to ensure that progress is constantly audited and that there is no further slippage?

Dr. Clark: My hon. Friend is right to remind the House of the complexity of this issue and of the many factors that are unknown to the best brains worldwide. He also makes a fair point when he asks what the previous Government did on this issue over the years. On attaining office, I came to the conclusion that they did very little. That is why we are faced with the problem today.
I am aware of the need constantly to monitor and to audit the problem. That is why I have asked each Government Department to send me, every quarter, detailed plans of how they aim to meet their proposals. I have assured the House that those detailed plans will be reported to the House, so that all hon. Members can see them in detail, monitor the position and check that no Departments are slipping. I am in the game of trying not to contrast Department A with Department B, but to ensure that the governing of this country can continue normally after 2000.

Mr. Ian Taylor: The Chancellor was unnecessarily touchy about the genuinely important questions that my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan) asked. He is also slightly ill informed. I am sure that his officials did not mean to ill inform him, but the previous Government did much on this issue, often with considerable criticism from people who thought that it was all hype.
I am delighted that the figures that he has come up with—which the previous Government started in order to meet the October deadline—show that the costs and the problem are serious. Will he confirm what I think he has just said to the hon. Member for Gordon (Mr. Bruce), the Liberal Democrat spokesman: the £370 million figure is only for central Government services, and the likely cost for the public services will be well over £1 billion? I think that he said at least £1 billion. In my judgment, it will be well over £1 billion because of the extensive problems of the Ministry of Defence, the Department of Social Security and the national health service.
Will the Minister say what he implied in his statement about prioritisation? Does that mean that some public service functions may not be able to continue? Will he answer the important point of what the cut-off date will be for testing, because half the cost is likely to be in the testing, not in the analysis, of the problem? Will he lay down to private sector companies a date beyond which


the public sector will not deal with them electronically— unless they have computer compliance that is acceptable to the Government?

Dr. Clark: The short answer to the hon. Gentleman's first question is yes. I am talking only about central Government Departments, and the estimate for them is £370 million.
No one has an accurate estimate of the ballpark figure for public services. I do not demur greatly from the figure proffered by the hon. Member for Gordon (Mr. Bruce) of about £1 billion.
As to our contracts with electronic and IT companies, we now have an agreement that all contracts must be for millennium-compliant machines and equipment. I have today asked the various Departments to do random tests on the equipment that they receive to ensure that those terms are adhered to.

Mr. Brian White: The Minister's statement will be greatly welcomed. Until 1 May, I was working in information technology and, had the good people of Milton Keynes not elected me, I would be working on the millennium problem. One of my concerns is that the debate is mostly about computers, not embedded software. Most people seem to ignore that. Will the Minister assure me that that will be given greater priority in the publicity he issues, and that the testing programmes, which are always the things to be cut in every computer system development programme, will not be cut in this case?

Dr. Clark: My hon. Friend is right to remind us that we are talking about not only IT systems, but the embedded chip issue, although we are not sure of the extent of that problem. It involves not only mainstream and personal computers but things involving dates, such as lifts. Many digital watches may also be affected. Some Departments may not have taken it completely on board, so I have written to all Departments to ensure that they are aware of it.
I heard what my hon. Friend said about testing. Those were very wise words. We shall try to adhere to that because, to ensure that our programme works on the critical day, testing must be done in the lead-up to that period.

Mr. David Atkinson: It is nearly two years to the week since I was the first to raise this issue on the Floor of the House, and was widely ridiculed for doing so.
I warmly welcome this overdue statement, but will the right hon. Gentleman confirm that it will not be enough to ensure that the computer systems for which the Government are responsible are millennium compliant because, if those with which they are linked in the private sector are not, they will all crash together? Will he therefore acknowledge the value of my private Member's Bill, the Companies (Millennium Computer Compliance) Bill, which is listed for its Second Reading tomorrow and which will do a great deal to ensure that this country will avoid much of the chaos that is predicted for two years' time?

Dr. Clark: I acknowledge the hon. Gentleman's interest and expertise in this subject. For obvious reasons,

I was aware of his Adjournment debate. Over the years, he has taken a sustained and real interest in this subject. His foresight at that time has been appreciated.
The House will decide on the hon. Gentleman's Bill, but he is absolutely right to say that it is no use us being compliant at the centre if other organisations—both public and private—with which we interface are not compliant. For that reason, we have asked Don Cruickshank to take this forward and to ensure that there are arrangements and co-ordination between the public and private sectors.

Fiona Mactaggart: I thank my right hon. Friend for the openness that was involved in the publication of the reports about how Departments will proceed. It will make discussions of this kind much more fruitful.
Is my right hon. Friend aware of the depth of the concern that is felt in the business community? First, there is concern about the continued sale of non-compliant equipment. I know that my right hon. Friend is not responsible for that, but I noticed that my hon. Friend the Minister for Small Firms, Trade and Industry was present earlier, and I hoped that my right hon. Friend would have conversations with the DTI.
Secondly, there is what could be described as a mirror image of the issue that has just been discussed. Private companies that have made progress with compliance are concerned about their relationship with Government, and feel that Government are progressing more slowly than some of them.
I spoke at a meeting of the southern region of the Confederation of British Industry, at which both those issues were raised. CBI representatives said in terms that they did not want petty bickering between parties; they wanted collaboration, seriousness and progress. That was stated at the meeting by the right hon. Member for Wokingham (Mr. Redwood).

Dr. Clark: My hon. Friend is right to draw attention to the fact that the Government are prepared to make the information available, not only to Members of Parliament but to anyone who cares to use the internet to find the detailed information supplied by the Department. That process will be on-going.
I take on board the message that my hon. Friend has passed on from the regional CBI that business does not want the issue to be bogged down in inter-party bickering. I am reassured by the fact that Opposition Back Benchers did not follow the lead of their Front-Bench spokesman, and have realised the seriousness of the issue. Along with my right hon. and hon. Friends, I shall try to ensure that they have as much information as possible, so that they can help us to make the balanced judgments that will need to be made.

Mr. Ian Bruce: May I follow what was said by the hon. Member for Slough (Fiona Mactaggart)? I believe that answers are needed to the list of questions that the Minister was given by my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan). I should be grateful if he would answer those questions and publish his answers, because all the issues are relevant.
Will the Minister assure the House that the all-party European informatics market group—of which I am vice-chairman—has been considering the subject for some


time? There have been a number of draft reports, and the group is now about to produce its final report. I hope that the Minister will meet officers and experts from industry so that we can discuss our findings.
The Minister may be interested to know that, in an early draft of the report, it was suggested that we could not have both the year 2000 and economic and monetary union. Clearly, having discovered that, the Chancellor decided to postpone EMU. We recommend that all new Bills should be considered in terms of their implications not just for manpower and cost but for information technology. The right hon. Gentleman has said that Departments' current budgets are sufficient to provide the £370 million that is needed. I do not agree with that, but, if we assume that it is correct, the cost of staff will rise enormously because of demand and the fact that their salaries will be increased.
Experts say that the problem will have to be cured by the end of 1998, because the year 99, put into certain codes, means something completely different from the year 1999. That is not just a millennium problem; it is also a year 99 problem.

Dr. Clark: Having participated in debates on the issue with the hon. Gentleman, I know that he takes a considerable interest in it, and knows a good deal about it. I think that, when he has time to read the detailed reports that are in the Library, he will see that Departments are aware of the problems. The various departmental budgets cover 97 per cent. of the £370 million that I mentioned earlier.
As the hon. Gentleman will know, the obsolescence factor in IT is very great, and there is a very short period for the upgrading and refurbishment of equipment and of IT generally. As we advance with the refurbishment, all the equipment involved is 2000-compliant. The problem is not quite as great as it might at first appear, but I listened to what the hon. Gentleman said, and I shall write to him if there is anything that I feel I have not covered.

Several hon. Members: rose—

Mr. Deputy Speaker (Sir Alan Haselhurst)>: Order. This is a complex matter, but I appeal for concise questions and answers.

Mr. Andrew Miller: Pursuant to his last reply, does my right hon. Friend agree that the millennium presents us with an opportunity, as well as a serious challenge? In the process of ensuring that Departments purchase millennium-compliant equipment, will advice go downstream to purchasing departments at the levels of, for instance, schools and local government? Will the same advice go to the private sector, particularly the small and medium business sector, through the DTI?

Dr. Clark: I have today stated the Government's position vis-a-vis our own Departments. We have also announced that we are establishing a ministerial group, and that we are asking Don Cruickshank to ensure that the very points raised by my hon. Friend are met. Those points are indeed very serious.

Rev. Martin Smyth: May I press the Minister? I recognise that he is speaking on behalf of

the central Department, and that he has also referred to other Departments, but is the Northern Ireland Office abreast of what is happening? At times, it seems to be in another orbit, and regularly behind developments.

Dr. Clark: The information that I have does not relate to the Northern Ireland Office, but we have made inquiries of the NIO. It is well aware of developments, and is in line with the other Departments.

Mr. Gordon Prentice: Does my right hon. Friend understand Labour Members' irritation at the way in which the issue was addressed by the hon. Member for Chesham and Amersham (Mrs. Gillan)? When did the last Government decide not to continue buying computer equipment and computer systems that were millennium-compliant? Has my right hon. Friend that date?

Dr. Clark: I do not have the date, but I think that the whole House will share my hon. Friend's disappointment at the cavalier and cavilling way in which the hon. Member for Chesham and Amersham (Mrs. Gillan) addressed the problem.

Mr. Keith Simpson: We have had a revelation this afternoon. Whenever the Opposition are on weak ground—[Interruption.] I am sorry, Mr. Deputy Speaker. I automatically think of the Labour party as being in opposition.
Whenever Labour Members are on weak ground, they suggest that party politics has somehow come into the issue. I think it right that my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan) should ask questions, and should receive answers from the Chancellor of the Duchy. After all, this is a serious issue.
May I bring a specific Government aspect to the right hon. Gentleman's attention? Many hon. Members would be amazed if the Ministry of Defence's compliance costs were only £200 million. I suspect that that figure will go up and up.
I am sure that the right hon. Gentleman understands that we are talking about a vital element of national security, ranging from our Trident nuclear deterrent to command and control systems that are now being operated by our military personnel in Bosnia and elsewhere. It has an international and a multinational dimension. In future, when we wish to question the Government, will we be able to question the right hon. Gentleman on specific departmental issues, or will we have to go from Department to Department to obtain answers?

Dr. Clark: The MOD estimate is accurate, I think. The MOD purchases about half of all the IT purchased by Government Departments. I agree with the hon. Gentleman that the Opposition are on weak ground, not because they are bringing in party politics, but because the hon. Member for Chesham and Amersham tries to rewrite history, which I find strange.

Mr. Tam Dalyell: On 13 March, I had an answer from Mrs. Angela Knight, then a Treasury Minister, which stated:


The Treasury has work in progress to identify and test its computer systems to ensure that they will operate correctly at the turn of the century. It has not proved necessary to commission any additional research."—[Official Report, 13 March 1997; Vol. 292, c. 323.]
Has my right hon. Friend resorted to any additional research, particularly in relation to the local authorities? The matter was raised in a Standing Committee on which I served with the hon. Member for Bournemouth, East (Mr. Atkinson).

Dr. Clark: The CCTA and the central IT unit in my Department have conducted considerable research into the matter. On the specific narrow issue, I shall make inquiries and write to my hon. Friend.

Mr. Christopher Chope: Following on from the previous question, can the right hon. Gentleman assure us that local authority systems and police command and control systems will be millennium compliant? Can he estimate the cost of putting those right?

Dr. Clark: As I said before, I cannot put a precise figure on it. I gave the ballpark figure that I estimated was the cost for the entire public sector. We had to take the new initiative because we found that the work had not been done previously by the Conservative Government. That is why we established the Cruickshank Action 2000, so that we could address the problems that he has brought to the attention of the House.

Dr. George Turner: As I have a background in information technology in a university environment, one aspect that disturbs me is that the millennium problem seems to be giving higher rewards to those with long memories than to those with recently trained skills. I suspect that, all too often, we are looking to botch and fix what should be replaced. One of the disadvantages of not starting early enough on a project is that that leads to a waste of money. Is that proving to be the case? If so, will my right hon. Friend give me an assurance that he will seek to minimise it? In the interests of those in the private sector, will he ask my right hon. Friend the Chancellor to investigate whether we can use the millennium as an opportunity for investment in new technology, rather than trying to fix the technology of the past decade?

Dr. Clark: My hon. Friend is right to draw to our attention the temptation to botch when one is faced with a short-term problem. According to the figures that I have, between 50 and 80 per cent. of reinvestment in IT is coping with that problem. It is important that we use the millennium as an opportunity to re-equip and refurbish our industry, so that we can compete more effectively in the new millennium.

Mr. John Hayes: Given the right hon. Gentleman's answer to the previous

question, and the comprehensive audit that has been carried out, perhaps he will answer a few specific questions—

Mr. Deputy Speaker: Order. Only one.

Mr. Hayes: One specific question, then. Will the right hon. Gentleman tell us how many older turnkey systems are in use in central Government Departments? The problem is more profound with older line of business turnkey systems, rather than with office productivity systems or hardware. How many of the turnkey systems in existence in Government Departments are more than five years old? Any that are more than five years old are bound to be non-compliant.

Dr. Clark: I do not know the answer. I shall find out, if possible, and write to the hon. Gentleman.

Mr. Fraser Kemp: I thank my right hon. Friend for his statement. I accept that, as he says, some of the costs associated with the problem can be met from existing IT budgets through the purchase of new equipment. What steps has he taken to ensure that all new materials, equipment and systems purchased now will be compliant and that we shall not have a problem with new equipment in a little more than two and a half years?

Dr. Clark: All the contracts that we have with companies supplying IT and similar equipment to us insist that the new equipment is millennium compliant. As from today, we are carrying out random tests of the equipment received, to make sure that that is the case.

Mr. Nicholas Soames: Is the right hon. Gentleman aware that I, my personal equipment and all my systems are entirely millennium compliant? More seriously, will he take on board the point made by my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) in relation to the Ministry of Defence?
First, having been a Minister there, I believe that the figures being quoted are way under the actual cost. Secondly, my hon. Friend's point about security applies not only to weapons systems and command and control systems, but to intelligence systems. Thirdly, will the right hon. Gentleman ensure that the Foreign Office and the Ministry of Defence inform the House of the representations that they have made to the former Soviet Union, in particular, and other countries holding nuclear weapons and other global weapons systems, and of whether Ministers are satisfied with the security of those systems, given the changes that are taking place in IT?

Dr. Clark: The House will be reassured to know that all the hon. Gentleman's personal equipment is millennium compliant. I am reassured that his clock chip is okay, and that his bios firmware is above the mark.
On the serious issue, the hon. Gentleman certainly has a knowledge of the Ministry of Defence, as I have. I have examined the figures carefully and I have heard what he said. We shall be able to see on a quarterly basis what the position is. He has drawn attention to a serious problem with some of the former Warsaw pact countries, which I shall draw to the attention of my right hon. Friends.

Business of the House

The President of the Council and Leader of the House of Commons (Mrs. Ann Taylor): With permission, Madam Speaker, I shall make a statement about the business for next week.
MONDAY 1 DECEMBER—Opposition Day [5th allotted day].
Until about 7 pm, there will be a debate on Government policies on welfare, pensions and disabled people, followed by a debate entitled "The Government's new burdens on business". Both debates will arise on Opposition motions.
TUESDAY 2 DECEMBER—Consideration in Committee of the European Communities (Amendment) Bill [second day].
WEDNESDAY 3 DECEMBER—Until 2 pm, there will be the usual debates on the motion for the Adjournment of the House.
Consideration in Committee of the European Communities (Amendment) Bill [third day].
THURSDAY 4 DECEMBER—Debate on the European Union on a motion for the Adjournment of the House. Details of the relevant documents will be given in the Official Report.
FRIDAY 5 DECEMBER—Debate on special educational needs in schools on a motion for the Adjournment of the House.
The provisional business for the following week will be as follows.
MONDAY 8 DECEMBER—Second Reading of the Government of Wales Bill.
TUESDAY 9 DECEMBER—Consideration in Committee of the European Parliamentary Elections Bill.
At 10 pm, the House will be asked to agree the winter supplementary estimates, the votes on account and supplementary defence vote A.
Proceedings on the Consolidated Fund Bill.
WEDNESDAY 10 DECEMBER—Until 2 pm, there will be the usual debates on the motion for the Adjournment of the House.
Remaining stages of the Social Security Bill.
THURSDAY 11 DECEMBER—Remaining stages of the Northern Ireland (Emergency Provisions) Bill.
FRIDAY 12 DECEMBER—Private Members' Bills.
The House may wish to be reminded that on Tuesday2 December there will be a debate on tobacco advertising in European Standing Committee B, and on Wednesday 3. December there will be a debate on part-time work, European works councils and parental leave in European Standing Committee B.
It is also proposed that, on Tuesday 9 December, there will be a debate on Agenda 2000: structural and cohesion policy, in European Standing Committee B. On Wednesday 10 December, there will be a debate on Agenda 2000: reform of the common agricultural policy, in European Standing Committee A, and a debate on Agenda 2000: a new financial framework, in European Standing Committee B.
Details of the relevant documents will be given in the Official Report.
It may be for the convenience of the House to know that, subject to the progress of business, it will be proposed that the House should rise for the Christmas Adjournment on Monday 22 December, and return on Monday 12 January. That means that the open three-hour Adjournment debate held before each Recess will be on the morning of Wednesday 17 December.

[Tuesday 2 December:

European Standing Committee B—Relevant European Community documents: 6294/97 and unnumbered, Tobacco Advertising. Relevant European Legislation Committee report: HC 155-vii (1997–98).

Wednesday 3 December:

European Standing Committee B—Relevant European Community documents: 10230/97, Part-Time Work; 10975/97, European Works Councils; 10975/97, Parental Leave. Relevant European Legislation Committee report: HC 155-vi.

Thursday 4 December:

Relevant documents: White Paper on Developments in the European Union, January—June 1997 (Cm 3802); The Commission's Work Programme for 1998. Political Priorities (COM (97) 517); The Commission's Work Programme for 1998. New Legislative Initiatives (SEC (97) 1852; European Community Document No 9984/97 on "Agenda 2000".

Tuesday 9 December:

European Standing Committee B—Relevant European Community document: 9984/97, Agenda 2000 Structural and Cohesion Policy. Relevant European Legislation Committee report: HC 155-vi (1997–98).

Wednesday 10 December:

European Standing Committee A—Relevant European Community document: 9984/97, Agenda 2000: Reform of the CAP. Relevant European Legislation Committee report: HC 155-vi (1997–98)

European Standing Committee B—Relevant European Community document: 9984/97, Agenda 2000: New Financial Framework. Relevant European Legislation Committee Report: HC 155-vi (1997–98).]

Sir Patrick Cormack: I once again thank the Leader of the House for announcing two weeks' business. That is very helpful, and much appreciated. I thank her also for providing the dates of the Christmas recess, but I ask her to think again.
The right hon. Lady must be aware that there are many working mothers—she is one herself—within the Palace of Westminster; and I do not refer only to elected Members. Would it not be more sensible to forgo a non-sitting Friday so that the House may rise on 19 December, rather than returning for one day and causing great inconvenience to hon. Members, and to members of staff—who are often neglected and who serve us so well in this place?
Will the Leader of the House kindly assure us that there will be no Government statement—we have seen this afternoon how long they can take—on Monday, which is a Supply day? Will she do her best to ensure that, unless there is an emergency, she will never schedule statements for Supply days?
The right hon. Lady may recall that there was always at least one day's debate on autumn financial statements in the past. A major financial statement was delivered this week: can the Leader of the House promise that we shall be able to debate it for at least one day?
The House will spend a number of days debating the European Communities (Amendment) Bill. Will the right hon. Lady provide an assurance that she has no intention of imposing a guillotine on that measure? In that context, as the House has now approved the Modernisation Committee's first report, will she say when she proposes to begin implementing the report's recommendations with respect to future Government legislation?
A statement this afternoon revealed the enormous potential danger posed by the millennium time bomb. Can we please have a full debate on that issue in the fairly near future?
Finally, I have received several very disturbing accounts from hon. Members—and not just those in my party—about the length of time that Ministers are taking to reply to letters. I refer not to letters on what might be called contentious topics, but to letters that often forward requests and inquiries from constituents and organisations. It is unacceptable that Members should have to wait from 1 September until 27 November, for example, for replies. Will the right hon. Lady, in her capacity as Leader of the House, deliver an early statement about that matter?

Mrs. Taylor: As to the first point, about the late sitting of the House until 22 December, it is not a matter of personal choice. Like the hon. Gentleman, I could do other things on that day, in both a personal and a constituency capacity. I know that many hon. Members try to attend constituency functions, sorting offices and things of that kind. However, the House has a heavy programme. I think that the hon. Gentleman is well aware of the reasons why Parliament cannot return any earlier, so we must sit on 22 December.
The hon. Gentleman asked for a guarantee that there would be no statement on Monday, or on Supply days generally. We try to avoid scheduling statements on such days. I can never say never, but we shall use our best endeavours to ensure that there are no statements on Monday. That is one reason why we had two statements today.
The hon. Gentleman asked for a debate on Tuesday's statement by the Chancellor of the Exchequer. I was somewhat surprised that there were no requests for such a debate during the question-and-answer session on Tuesday. Perhaps hon. Members have thought about it since then. Hon. Members had a good opportunity to question the Chancellor on Tuesday, but I will not rule out a debate. Perhaps we can discuss it through the usual channels: I am happy to enter into discussions on that point.
As to the European Communities (Amendment) Bill, we are allowing two days for further discussions next week, and we shall see what kind of progress is made then. We have just had a statement on the "millennium time bomb", as the hon. Gentleman called it. My right hon. Friend the Chancellor of the Duchy of Lancaster said that he would keep the House informed about the issue, and that he intended to place significant information in the

Library. We shall monitor the situation, and, if it proves necessary, my right hon. Friend will return to the House and update hon. Members.
The hon. Member for South Staffordshire referred to the delay in ministerial replies to hon. Members. I am aware of that problem, because it was raised in the House a few weeks ago. I said then that, if any hon. Member had particular difficulties, I would try to check on the situation. One or two examples were provided, but there have been few representations.
I know from my own inquiries that Ministers are receiving far more letters than their predecessors did in the previous Administration. Expectations of Ministers are higher this time, so replies sometimes take longer. I repeat that, although I offered to try to help, very few hon. Members have taken up that offer of assistance.

Mr. Ted Rowlands: I welcome the fact that the Government of Wales Bill is to have a Second Reading. If the Government intend to split the Bill between the Floor of the House and Standing Committee, will hon. Members who represent Welsh constituencies be fully consulted about such a split? Will my right hon. Friend give considerable thought to how the Committee stage will be dealt with? She may remember that there were many protests about the handling of Welsh legislation in the last Parliament. Will she ensure that all Welsh Members who are interested in serving on such a Committee will be able to do so?

Mrs. Taylor: I know that my hon. Friend has very strong views on this matter, as do other hon. Members on both sides of the House. There is no simple party divide as to how we should handle legislation of that kind.
As I said in my statement, I have announced the business for the second week on a provisional basis. Discussions have begun through the usual channels about the handling of the Government of Wales Bill—and, later, of the Scotland Bill. We want to try to agree a way forward with all parties in the House. I hope that hon. Members will make their views known and will feel able to make representations in the way that my hon. Friend has done. When we have had further discussions, I hope to be in a position to make a more definitive statement about how the Bills will be dealt with.

Mr. Paul Tyler: I reiterate the concern felt by many hon. Members about the delays in ministerial correspondence. There is equal concern about the apparent increase in the number of delayed replies to written questions.
I reinforce the concern that I think will be expressed by hon. Members and members of staff about the business on Monday 22 December. Perhaps the Leader of the House can examine carefully the business for that day to see whether she may ease the strain and stress.
I thank the Leader of the House for listening to representations about the timing of the debate on welfare to work. Many hon. Members—particularly those who serve on the Social Security Select Committee—would have been at a considerable disadvantage and would have been unable to participate in the debate as they will be on a special study tour on the day specified. Will the Leader of the House announce an exact date for the usual


statement on social security benefits upgrading, which we expect at this time of year and which is of considerable importance to our constituents?
We were anticipating the arrival of several measures— both Bills and White Papers—from the Department of Health, perhaps in conjunction with other Departments. However, they seem to have been pushed into a backwater or up a branch line in Downing street—to either No. 10 or the Cabinet Office—with the intervention of yet more Ministers and consequent delays. We expected to see three Bills in the next few days, as well as a White Paper on food safety, and we now do not know when they will arrive. Will the Leader of the House assure us that that is not a sign that the position of the Secretary of State for Health is now unassailable?

Mrs. Taylor: I take the point that the hon. Gentleman made about delays in letters and written answers. If he has specific information on such delays, I should be happy to deal with any queries that he may wish to raise with me.
I appreciate the problems that the 22 December sitting will cause for some hon. Members, but we have a very packed legislative programme, and there are some Second Readings that we wish to progress.
In his last point, the hon. Gentleman complained that the House is not making enough progress, yet he complains that we will sit on 22 December. These are difficult judgments, but we want to go ahead with as much of the programme as possible.
I appreciate the hon. Gentleman's comments on changing the date of the welfare-to-work debate, which is provisionally scheduled for 19 December. I hope that that date will be for the convenience of hon. Members who, for very good reasons, requested a change of date. We will try to accommodate such changes if they are necessary. That is one reason why I say that business for the second week is provisional.
My right hon. Friend the Secretary of State for Health is happy with progress on the various very large issues that are facing his Department. We will have a White Paper on health in the very near future, and it is important that such a White Paper is launched by a statement in the House. We need to make statements to the House on a series of issues. Therefore, it will be better if we try to pace them, and ensure that each gets proper consideration.

Mrs. Gwyneth Dunwoody: Will my right hon. Friend try to find time for an urgent debate on maintaining jobs in manufacturing industry? My constituency might serve as an example. We are facing pressure on jobs in train repairing, in Rolls-Royce motor cars, and even in a tea factory. Will she also seriously examine the business of retaining the absurd system of having Fridays off—which effectively means that Thursdays, too, are a dead day? Ministers and hon. Members would really much prefer to work solidly through the week, right up to Christmas, rather than to have extra days, such as 22 December.

Mrs. Taylor: The House will be sitting every Friday this month. Two of the Fridays will be used for debates on the Adjournment, in Government time, and two of them will be used as private Members' days. We currently have a good mix in the use of Fridays. I think that most

hon. Members appreciate constituency Fridays, because we can plan some time in advance what we will do in our constituencies.
I appreciate and understand my hon. Friend's long-term concern about jobs in the manufacturing sector. I hope that my right hon. Friend the Chancellor of the Exchequer's statement on Tuesday and the Government's welfare to work programme will help to improve skills in this country, with a consequential beneficial impact on jobs in manufacturing. Perhaps that matter could be raised in the debate that I said should be held on 19 December.

Sir David Madel: Will the right hon. Lady look again at the business on Friday, 5 December? Yesterday, the Prime Minister said that he could not answer questions about disability benefits, because a consultation process was going on. There is, of course, also a consultation process going on about special educational needs in schools, and it is not due to finish until 9 January 1998.
Therefore, it would be much better to hold the debate scheduled for Friday, 5 December after the consultation process has ended—in the middle of January. If that were done, she could move the programme for Monday, 22 December to Friday, 5 December, perfectly dealing with the point made by my hon. Friend the Member for South Staffordshire (Sir P. Cormack) on the organisation of business in the House.

Mrs. Taylor: It is very easy to shuffle all those cards around. Ultimately, however, we have to provide, for example, for two weekends after Second Readings. If we did not, Conservative Members, including the hon. Gentleman, might well complain. The matter is therefore not quite as simple as shuffling the cards, as he suggests.
It is a very good idea to have a debate on special educational needs. Many hon. Members feel that it would be beneficial if the Green Paper itself were discussed. It would be a good opportunity for hon. Members to report on the consultations that have already taken place, and for Ministers in that Department to open the debate and to give the paper further publicity, so that more people can participate in the consultation exercise.

Mr. David Winnick: If, as we hope, tomorrow's private Member's Bill will be passed by a large majority, will my right hon. Friend tell us whether, next week, there will be a statement of the Government's intention? Has she seen the latest opinion poll, in today's edition of The Times, which shows that more than two thirds of the public support the measure? It seems to me that the Government should give either time or a definite commitment that such a measure will be added later—for example, to a Criminal Justice Bill. The House should be told. The public want such a measure, and they have a right to expect progress towards proper legislation.

Mrs. Taylor: There is a great deal of interest, both inside and outside the House, about tomorrow's debate on the Wild Mammals (Hunting with Dogs) Bill. I myself will be voting for it. If the House supports the Bill tomorrow, I hope that the Bill's opponents will respect that support, and not attempt to frustrate its passage.


We should not anticipate problems before they occur, but we have made it clear that we cannot provide Government time for any private Member's Bill.

Dr. Liam Fox: Will the Leader of the House make time for a debate on Members' privilege? She will be aware that, last week, I raised the issue of the M5 contract irregularities. I am restricted in making the case on that matter directly to the Secretary of State, because an hon. Member is not covered by the same privilege when making a case to the Secretary of State as he or she is when speaking in the House.
It seems to be a ridiculous compartmentalisation of our work that we can raise an issue orally in the House to deal with something that we regard as a wrongdoing in our constituency, but that we cannot put the matter to the Secretary of State in writing. If we are to work effectively, does not that anomaly have to end?

Mrs. Taylor: The hon. Gentleman raises a significant point that affects all hon. Members trying to perform their job on behalf of their constituents. I cannot promise a debate, as he requested, but I will draw his comments to the attention of the Joint Committee on Parliamentary Privilege. Perhaps I should remind hon. Members of the existence of that Committee. We will be inviting anyone with an interest in the matter or who wishes to comment on changes to submit evidence to the Committee. Examples of the type that he gave will help the Committee in its work.

Mr. Dennis Canavan: Before the Christmas recess, can we have a statement from the Secretary of State for Social Security that will end, once and for all, the social insecurity being caused by her proposals to cut benefits for single parents and their children? More than 100 Labour Members have signed a letter of protest, and more than 90 hon. Members have signed early-day motion 333, deploring such an attack on the living standards of single parents and their children.

[That this House notes that a major impact of any cut in lone parent child benefit will be on parents who obtain work and that this appears to be contrary to the Government's strategic objective of encouraging lone parents to get jobs; therefore considers that before proceeding with this proposal a full assessment of its impact on the living standards of the children should be undertaken, including reference to the Social Security Advisory Committee and consultation especially with women's organisations and those campaigning against child poverty, so that these can be taken fully into account by both the Government and the House.]

Mrs. Taylor: On other occasions, Ministers have explained not only the position and the difficulties that we have inherited, but the significant initiatives that have been taken to help lone parents back into work. The points raised by my hon. Friend can, of course, be raised in other debates that will be held in the near future.

Mrs. Margaret Ewing: What liaison has the Leader of the House had with the Scottish Office and with Scottish Members in determining the pattern of business in the House? Why, for example, will we not have before

Christmas the publication or a Second Reading debate on a Scottish Parliament Bill—although we welcome the debate on the Welsh Assembly?
May I point out also that, next week, the Scottish Grand Committee will meet on Wednesday afternoon. Hon. Members who serve on the highlands and islands convention will have to leave on the Thursday afternoon to attend a meeting, on Friday, in the Orkneys. That will deprive us of the opportunity to participate in a debate on the European Union, although the European Union is very important to the highlands and islands of Scotland. There needs to be a recognition of the pressures that are placed on hon. Members who come from the far-flung corners of the United Kingdom.

Mrs. Taylor: All hon. Members find it very difficult to do all the things that they would like to do. Very often, choices have to be made between constituency work, attending Committees and being in the Chamber. It is an inevitable difficulty, which always arises. As for the Scotland Bill, I have not announced all the business up to the Christmas recess or all the Bills that will be published.

Mr. Tam Dalyell: Does that mean that the Scotland Bill is likely to be debated on 22 December?
I have given the Leader of the House notice of my next question: given the widespread feeling among Arab countries that Britain is acting as the poodle of the United States, is there any possibility of some proper discussion of our relations with the Arab world?

Mrs. Taylor: In response to my hon. Friend's suggestion that I am simply keeping the House sitting on 22 December to debate the Scotland Bill, I have to say that other Bills are awaiting their Second Reading as well as the Scotland Bill. As for his request for a debate on our relations with the Arab world, I am grateful to him for giving me notice of it. My hon. Friend is always heard with great respect on these issues. During the recent crisis, we tried to keep the House as informed as possible, but I am sorry that I cannot find time for the debate that my hon. Friend wants. He could perhaps raise such issues in the Adjournment debate before the Christmas recess.

Mr. Graham Brady: I am sure that the right hon. Lady will be as concerned as I am that I received a telephone call in my office only at 11 am today, informing me that the Secretary of State for Education and Employment was opening a new building at a college of further education in Altrincham at lunchtime today. I gather from the point of order raised yesterday by the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) that this lack of notice is an increasing trend. Will the right hon. Lady arrange a seminar on procedure for her ministerial colleagues?

Mrs. Taylor: I will certainly investigate what the hon. Gentleman has said, although, if my right hon. Friend the Secretary of State for Education and Employment was to be in Altrincham at lunchtime, he must have done very well, because he was certainly in London at 11.30 am.

Mr. Peter L. Pike: My right hon. Friend will be aware of press rumours that there might be a change in Government policy with regard to freemasonry and the


appointment of the judiciary. Will she find time for a statement to be made to the House next week to clarify the Government's position in that respect?

Mrs. Taylor: The Government have not changed their mind on freemasonry. We remain of the view that the public interest is served by having a register of membership of the freemasons for police officers, magistrates, Crown prosecutors and judges. We are considering the detail of how to implement that approach, and we will be responding as soon as possible to the Home Affairs Select Committee, which has commented on this matter.

Mr. Bernard Jenkin: Will the Leader of the House stand by the assurance given by the Secretary of State for Wales in a press release issued this morning on the publication of the Government of Wales Bill:
During the Bill's parliamentary progress, it is, of course, open to any hon. Member to pur forward changes to the Bill and to have these explored in detail through open debate."?

Mrs. Taylor: I am sure that the Bill will get the full attention of all hon. Members, which it deserves. As I said, we are discussing through the usual channels and with other hon. Members the detailed handling of the Bill.

Mr. Desmond Turner: Will the Leader of the House find time for a short debate on industrial relations, particularly in light of the extensive lobby of the House this afternoon by members of staff from Barclays bank, who have been involved in a long-running dispute, which I regret has not been the subject of conciliation and arbitration by the Advisory, Conciliation and Arbitration Service, as the Government would wish?

Mrs. Taylor: I am afraid that I cannot arrange for such a debate. My hon. Friend will be aware that the Government would not wish to intervene in or comment on disputes of this kind. If he has a particular constituency interest, he might find other ways—perhaps by applying for an Adjournment debate—to raise the issue in the House.

Mr. John Bercow: Will the Leader of the House find time for a debate next week on the national minimum wage, as that would enable the House to explore the deep and worrying split between the President of the Board of Trade, who believes that widespread exemptions from it are impracticable, and the Minister without Portfolio, who believes that they are essential? Does the right hon. Lady understand that, if her answer is the usual niggardly no, people will start to inquire what exactly this shabby and unprincipled Government are afraid of?

Mrs. Taylor: The hon. Gentleman does not seem to be aware that the National Minimum Wage Bill was published today, and will be discussed in the House in the near future.

Rev. Martin Smyth: The Leader of the House referred to the fact that hon. Members like to have two weekends between Second Reading and the Committee stage of a Bill. I understand that my

colleagues were not able to table amendments to the Northern Ireland (Emergency Provisions) Bill because of pressures placed on them by the Stormont talks. Would it be possible for amendments to be taken on Third Reading?

Mrs. Taylor: If hon. Members face any particular difficulties, we will always consider them, but we have given as much notice as possible of all stages of the Bills that have been introduced.

Mr. Nicholas Soames: I join my hon. Friend the Member for South Staffordshire (Sir P. Cormack) in thanking the Leader of the House for giving two weeks' notice of business. It is extraordinarily helpful to colleagues to be able to plan further ahead. It is very good of her to make the effort, and I am sure that it is a practice that she will continue.
I respectfully draw to the right hon. Lady's attention a point made by several colleagues about the lateness of ministerial replies to constituents' letters. Not only are they consistently late—it is not true that the burden of letters is greater now: I have checked with my former Department and the burden is about the same, although it is still onerous—but many are not signed by Ministers, and this is happening regularly.
Of course, Ministers often have to go abroad and letters have to be signed in their absence perfectly straightforwardly, but the number of instances of this happening is unacceptable. Does the right hon. Lady accept that such a practice is not only impertinent to hon. Members who are writing to Ministers in an official capacity, but extremely rude to their constituents who have a right to expect a Minister to take the trouble to sign a reply which has, in any event, been drafted for him by someone else?

Mrs. Taylor: I am grateful to the hon. Gentleman for his opening comments. I will try to sustain the practice of giving two weeks' notice, but, as I said, it might not always be possible and such business will be provisional.
As for ministerial replies, I have said that I am concerned if there is a problem. I would welcome evidence from individual Members. The burden of letters is greater—I have checked with one or two Departments where that is clearly the case. The hon. Gentleman referred to Ministers not signing letters personally. There are always occasions, under any Government, when Ministers are not available, and I am glad that some hon. Members recognise that. It is of course desirable that Ministers should sign letters to hon. Members wherever possible, but that cannot always be the case.

Mr. Oliver Letwin: Will the Leader of the House clarify her views on the conduct of European Standing Committee B? There have been a number of occasions—indeed, this has happened at every sitting so far—when papers have been delivered extraordinarily late, sometimes with only 12 hours' notice. There have also been times when Ministers have steadfastly refused to answer serious questions, and the Liberal Democrats have been utterly absent from the previous three sittings, thereby illustrating their contempt for the Committee proceedings.
Will the Leader of the House tell us why the most recent papers for the tobacco debate to which she referred fail to contain any reference to compliance costs or risk assessment, despite the relevance of those issues to that debate?

Mrs. Taylor: If the hon. Gentleman has some queries about any of the factors he mentioned at the end of his question, he will be able to raise them in that Committee. I take this opportunity to remind all hon. Members that they can attend the European Standing Committees—and, indeed, some do. I know that there was a difficulty this week—on Tuesday, I think—in the sense that one of the documents that was tagged as relevant to the debate was not available until the evening before. However, it was not the document that was to be approved. It was an incidental document, which was useful but not vital to the work of the Committee.
As for the absence of Liberal Members, it is not for me to answer for them, although I suspect that some may have spent some time in Winchester.

Mr. Andrew Lansley: Will the Leader of the House find an early opportunity for a debate on local government finance, or allow for a debate shortly after any statement on the revenue support grant settlement? Is she aware that that will present an opportunity for a matter of serious concern in Cambridgeshire to be aired? Less than a month before the general election, the Prime Minister promised that the recommendations of the Elliott review into the area cost adjustment would be implemented for 1998–99, but her hon. Friend the Minister for Local Government and Housing says that that is not to happen, so that promise is to be broken.

Mrs. Taylor: I can confirm that the Department is considering a fairer system for the working of local government finance, and that there is much discussion on that matter. A statement on this year's settlement will be made in the near future.

Mr. Laurence Robertson: Can the Leader of the House be a little more specific about the Committee stage of the Government of Wales Bill, following the point raised by my hon. Friend the Member for North Essex (Mr. Jenkin) and also the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), who sits on the Government Benches? Will she take into account the fact that, although hon. Members from Wales have a great deal to contribute to such a Bill, so do hon. Members on both sides of the House?

Mrs. Taylor: I am sure that hon. Members from Wales have a great deal to say, although none of them will be

representatives of the Conservative party, because it has no Members for Wales. I have been as fair as possible. The usual channels are discussing the handling of the Bills, and my colleagues and I in the usual channels are happy to receive any representations from any quarter of the House.

Mr. David Chidgey: Is the right hon. Lady aware of the growing public concern at the aggressive and predatory marketing of pre-paid funeral services targeted particularly at the elderly and the vulnerable, as set out in some detail in early-day motion 504.

[That this House notes the growing concern over allegations of widespread aggressive and predatory marketing of prepaid and at need funeral and burial services targeted at the elderly and bereaved, the lack of transparency in the ownership of seemingly family run funeral parlours and in the prices charged for their services; the lack of control over the use and management of investments into prepaid funeral plans, now exceeding £10 million and growing rapidly and over the endorsement of these products by registered charities whose subsidiary trading companies are in receipt of commissions on sales; further notes that recommendations made by the Office of Fair Trading in 1995 to curb anti-competitive practices in the supply of funeral services have yet to be acted upon; and calls on the Government to bring forward legislation without further delay to regulate the selling and management of prepaid funeral investment plans, require total transparency in the declaration and display of ownership of funeral businesses and their charges, control the commercial activities of registered charities and their trading subsidiaries in the context of their charitable status and prohibit anti-competitive and predatory trading practices through direct selling techniques, through monopoly positions, and through exclusive commercial arrangements with nursing homes, hospices and NHS hospitals bereavement services.]

May I remind the right hon. Lady and the House that, in 1995, the Office of Fair Trading reported in some detail on the unregulated nature of those services, and made several recommendations on introducing regulatory legislation? Please will she find time to debate that issue fully in the House to try to stamp out the unfair practices and predatory behaviour of those organisations?

Mrs. Taylor: I can understand the hon. Gentleman's concern, which may be shared by hon. Members on both sides of the House. There have been difficulties, which have been reported to many of us as constituency Members. Presumably that is why that early-day motion was tabled. My hon. Friend the Minister responsible for consumer affairs is studying that matter and consulting. Perhaps that issue would be suitable for an Adjournment debate.

Orders of the Day — European Communities (Amendment) Bill

Considered in Committee

[SIR ALAN HASELHURST in the Chair]

Orders of the Day — Clause 1

MEANING OF "THE TREATIES" AND "THE COMMUNITY TREATIES"

Mr. Michael Howard: I beg to move amendment No. 65 in page 1, line 12, at end insert—
'but (for the avoidance of doubt) not Article 1 of the said Treaty.'.

The Chairman of Ways and Means (Sir Alan Haselhurst): With this, it will be convenient to discuss the following amendments: No. 13, in page 1, line 13, after '(i)', insert
'Article 1 (other than paragraph 1)'.
No. 14, in page 1, line 13, after '(i)', insert
'Article 1 (other than paragraph 3)'.
No. 15, in page 1, line 13, after '(i)', insert
'Article 1 (other than paragraph 5)'.
No. 17, in page 1, line 13, after '(i)', insert
'Article 1 (other than paragraph 10)'.
No. 18, in page 1, line 13, after '(i)', insert
'Article 1 (other than paragraph 11)'.
No. 19, in page 1, line 13, after '(i)', insert
'Article 1 (other than paragraph 12)'.
No. 20, in page 1, line 13, after '(i)', insert
'Article 1 (other than paragraph 13)'.
No. 21, in page 1, line 13, after '(i)', insert
'Article 1 (other than paragraph 14)'.
No. 1, in page 1, line 13, after 'Articles', insert
'1, other than the words in paragraph 5, (Cm. 3780, page 9) "and through the establishment of economic and monetary union, ultimately including a single currency in accordance with the provisions of this Treaty".'.
New clause 30—Extension of jurisdiction of European Court of Justice: legal advice—
'.—This Act shall not come into force until Her Majesty's Government has obtained specific legal advice from the Attorney General setting out the extent to which the provisions on police and judicial co-operation in criminal matters in Article 1 para 11 of the Treaty of Amsterdam extend the jurisdiction of the European Court of Justice in the United Kingdom, such advice to form the basis of a report to each House of Parliament and to be subject to an affirmative resolution.'.
New clause 37—Relations between European Union and WEU—
'—The Government will not take any steps to foster relations between the European Union the WEU with the view to the possibility of the integration of the WEU into the Union, as contemplated by Article 1, paragraph 10 [Article J.7] of the Treaty of Amsterdam, without first tabling a motion in each House of Parliament which shall be subject to affirmative resolution.'.

New clause 38—Common foreign and security policy—
'—The Government shall not take any steps to participate in the decision making arrangements as set out in Article 1 paragraph 10 [Article J.13 1 and 2] of the Treaty of Amsterdam, without first tabling a motion in each House of Parliament which shall be subject to affirmative resolution.'.

Mr. Howard: Today, we begin our detailed examination of the treaty of Amsterdam. That treaty was the first major test of the Government's attitude to important international negotiations. We can assess their performance by reference to a number of criteria. How successful were they in achieving their declared objectives? Did they press and persuade our partners in the European Union to come round to Britain's way of thinking when they might initially have been disposed to take another view? Were they steadfast in resisting the views of our partners when those views did not reflect this country's interests or represent the best way forward for Europe as a whole?
On all those criteria, the previous Government's record was impressive. We demonstrated that it was possible to take a leading role in Europe—hon. Members need look no further than the single market for an outstanding example of that—while successfully safeguarding Britain's interests.
I hope that, after the Foreign Secretary's extraordinary revelations on Tuesday we shall hear no more about the wonderful spirit of co-operation that has supposedly been brought about by the Government's attitude to Europe. Last Tuesday, we were told that, after the summit had ended, Spain and the Dutch presidency had reached a bilateral agreement. That deal made a significant change in the treaty and one that was detrimental to Britain's interests. Moreover, it is in direct contradiction with what the Prime Minister told the House on his return from Amsterdam on 18 June. It is an extraordinary allegation to have made. If true, it gives the lie in the clearest possible way to the Government's pretensions and so-called achievements in Europe.
Let us examine the present Government's performance against those criteria.

Mr. Mike Gapes: Is the right hon. and learned Gentleman saying that the previous Government, with their policy of stopping the show at the negotiations, would have got a successful agreement with all the other European Union countries? Or is he saying that he disagrees with the policy of the former right hon. and learned Member for Edinburgh, Pentlands and would not have adopted that approach if he had been Foreign Secretary at that time?

Mr. Howard: I have no doubt that the previous Government would have obtained a successful outcome at Amsterdam and one that would have differed significantly from that obtained by the present Government.
Some of the most important aspects of the Amsterdam treaty are dealt with in the amendments and new clauses that we are considering today. Hon. Members will be aware that not all parts of the treaty are amendments to the European Communities Act. Those parts which do not need to be incorporated in our legal system can be agreed by the Government without the approval of the House. Treaty articles which are held to be intergovernmental in


structure come into that category. Yet, although nominally intergovernmental—I shall come to that shortly—those provisions will have a significant impact on the sovereignty of this House and Britain's place within the European Union.
The amendments and new clauses tabled in my name and those of my right hon. and hon. Friends would, if accepted, make it clear that, although the House cannot override the Government's right to use the Crown's treaty-making prerogative, it does not accept the principle set out in article 1 of the Amsterdam treaty. That article contains measures which give rise to serious concerns about the treaty among Conservative Members. Many were measures that the Conservative party promised to oppose in its manifesto, and many were measures that Labour, too, claimed it would resist.
Three main aspects of the article concern us. The first is the role and powers of the European Court of Justice, the second the measures on human rights and the third, the moves towards further integration in foreign policy and defence. I will deal with each in turn, but I shall begin by exploring a little further the supposed division of the Amsterdam treaty into supranational and intergovernmental sections—the distinction which limits the extent to which the House has any real say over the ratification of that part of the treaty.
At Maastricht, foreign and security policy and justice and home affairs policy were hived off into the so-called second and third pillars. They were to be intergovernmental matters, with the question of the jurisdiction of the European Court of Justice left open. The Amsterdam treaty does much to undermine that pillared structure. Article K.7, for example, explicitly involves the European Court of Justice in the third pillar, seriously undermining the valuable distinction that we had agreed at Maastricht. I apologise to hon. Members if this seems abstruse and esoteric, but it is important.
The involvement of the European Court of Justice in that area of policy represents the difference between collaboration among nations and supranational authority. It is the difference between co-operation and integration. Since neither the Prime Minister nor the Foreign Secretary made any mention whatever of that article, I can only conclude that its importance has eluded them. However, I cannot believe that even they can have missed the significance of article K.2 on policing. The previous Government were proud to have agreed measures on common action against international terrorism. We played a key role in the establishment of Europol. At a time when Germany and France held completely different views about its nature—they were at an impasse—I helped to bridge the differences and bring them together.
6 pm
We were always aware that some of our European partners had ambitions to create a European army and a European police force. Some members wanted Europol to be a superior federal force, a sort of European FBI. Article K.2 is a step in that direction. It empowers Europol personnel to join in national policing operations in a support capacity. That is a significant change. What status will those personnel have? Will they have diplomatic

immunity? How, and to whom, will they be accountable? Those are serious questions to which I hope the Minister will respond.
Our reservations are reinforced by the provisions in the treaty that relate to the European Court of Justice. All parties should be able to agree on reform of the court. All parties should cherish the impartiality and efficiency of judicial institutions. This debate has nothing to do with whether one believes in a Europe of nations, as we do, or wants to hand over yet more powers to Brussels, as the Government do. The Conservative party believes that the European Court of Justice must remain the guarantor of the single market. Common rules require a supreme authority to interpret them. Without a strong, independent court, we could neither ensure the even application of Community law nor prevent the abuse of power by other EU institutions.
It is equally important that the European Court of Justice remains within the remit given it by member states. That much is, or ought to be, common ground to left and right, federalists and non-federalists. There is concern across the EU that the European Court of Justice has taken to exceeding its competence and to adopting its own political agenda. Several judgments, such as that in the Francovich case, have gone beyond what is provided for in the text of the treaties. Some have had serious consequences for national exchequers. In a series of controversial judgments, the court has extended its jurisdiction beyond what was specifically bestowed on it by member states. That should worry all democrats, especially as there is no right of appeal beyond the court.
The court's recent ruling on the 48-hour week is a clear example of the treaty being interpreted in a way that was not intended. Of course, there is an argument to be had about such measures. We believe that such labour market regulations can destroy jobs, and that Britain's employment record backs that up. The Labour party takes a different view, as it is entitled to. The argument in this case is clearly about social policy. For the European Court of Justice to rule that it is a health and safety issue stretches legal credibility.

Dr. Nick Palmer: The right hon. and learned Gentleman said that there was widespread concern across Europe about the alleged extension of the powers of the European Court of Justice, and mentioned the 48-hour week. Can he name a country whose Government have expressed concern about preventing their citizens from being forced to work more than 48 hours a week?

Mr. Howard: Many employer organisations and other people in Europe recognise the damage that arbitrary provisions of this nature can do to job creation.
To take another example—on which I hope there will be some cross-party consensus—the European Court of Justice recently ruled that Britain could not reserve its fishing quota for its own fishermen. Again, that ruling violated the clear intention of the treaties. When Britain gave up its exclusive right to fish its waters, it did so in return for a guaranteed quota of the total stocks. For that remaining quota to be fished by foreign vessels flying British flags of convenience undermines the basis of the fishing agreement; but the court ruled that the Merchant Shipping Act 1988, designed to return to the intention of the treaties by requiring British-registered vessels to be


largely British, was illegal. If, like us, the Labour party believed that such decisions were wrong, why did it not join us in pressing for reform of the institution that gave rise to them?
It was precisely to tackle such problems that the previous Government placed such emphasis on reforming the workings of the court. At the intergovernmental negotiations, we tabled a package of measures aimed at improving its effectiveness and curtailing any possibility of political bias. We wanted to limit the retrospective application of its judgments; to introduce the principle that member states should be liable for damages only in cases of serious and manifest breaches of their obligations; national time limits in cases based on EC law; and streamlined procedures for the rapid amendment of EC laws that have been interpreted in ways in which member states had never intended. Those comprehensive, sensible proposals would have streamlined the court and eliminated many of its most egregious flaws, without affecting its position as supreme guarantor of the treaties.

Mr. Denzil Davies: Does the right hon. and learned Gentleman agree that one reform that could hardly be described as revolutionary would be to allow one dissenting judgment? It must be the only supreme court in the world, outside the old Soviet Union, where dissenting judgments are not allowed.

Mr. Howard: The right hon. Gentleman has long studied the matter in detail, and his views are always expressed with force and heard with respect.

Mr. Bernard Jenkin: Is not the real difficulty the fact that the court has to choose between such a variety of different bits of treaties in arriving at judgments? There is no logical reason why, for example, in the Factortame case, the single market provisions should have overruled other treaty provisions which allow member states to allocate their fish stocks. Until we resolve that ambiguity, the court will be able to choose which part of the treaty to interpret as supreme for the political convenience of the majority to continue to pursue the federalist agenda.

Mr. Howard: My hon. Friend touches on a fundamental matter, but all courts often have to deal with such difficult decisions.
The reforms that the previous Government put on the agenda were a serious attempt to deal with the gravest flaws in the workings of the European Court of Justice and had the support of some other Governments, including some who wanted much deeper European integration but who wanted it on the basis of sound legal principles.
What happened when the Labour party took over from us at the negotiations? It abandoned every one of those suggestions—and why? Because in the words of the Minister, there was little support for such reform in the intergovernmental conference. That explanation goes to the root of Labour's approach to Europe: its fear of isolation, its readiness to pursue the line of least resistance, and its unwillingness to win our partners round by argument. Sometimes it is necessary to be isolated— not for its own sake, but because without being prepared to stand alone we would never have secured our opt-out

from the single currency, won the budget rebate or been able to opt out of common policies on integration and frontiers. The present Government are happy to reap the rewards of the previous Government's readiness to be isolated when the occasion demanded, but lack the courage and conviction to stand alone themselves. That bodes ill for our long-term national interests in the EU.
Not only did the Government abandon our sensible proposals for reform, they agreed to further extensions of the court's jurisdiction. I hope that the Minister will give us details and say how they will affect our law, both civil and criminal. That is the subject of new clause 30, in which we ask for a report to the House from the Attorney-General on those matters.
We also have reservations about article F.1 of the Amsterdam treaty, which is to become article 7 of the renumbered treaty on European Union. As hon. Members will be aware, this is the article that empowers the Council of Ministers to remove the voting rights or, indeed, any other rights, from the country which it claims is breaching human rights.
It should go without saying in a democracy such as ours that every Member of Parliament supports the principles of human rights, individual freedom and the rule of law. The attempts by the Foreign Secretary to caricature our opposition to article F.1 of the treaty have not become him. In the 1980s, a unilateralist pressure group calling itself the Movement for the Preservation of Life on Earth—something that the rest of us, it implied, were supposed to be against—was in alliance with the now Foreign Secretary in its pursuit of unilateral nuclear disarmament. To present the issue as a disagreement about basic human rights is a childish tactic worthy of those 1980s peace activists who were his allies in those days.
Let me run through our concerns about clause 1. They are widely shared. First, the rights in question are vaguely defined. All of us believe in human rights, as they are traditionally understood in Britain—the right to free assembly, the right to free speech, habeas corpus and so on—but is there a basic human right to a minimum wage or to abortion on demand? Under the Amsterdam treaty, those questions will be dealt with not by any judicial body but by other politicians sitting in the Council of Ministers. I know of no precedent in diplomacy or in law for the signatory to a treaty losing its rights but not its obligations at the behest of its fellow signatories.

Mr. Roger Casale: The right hon. and learned Gentleman makes the point that countries such as Britain will lose their veto under clause F. 1, but he knows very well that that is not the case. The decision about whether a breach of human rights has occurred has still to be unanimous within the Council of Ministers. Only once a persistent breach of human rights has been ascertained by unanimity can sanctions be triggered. Only at that stage does qualified majority voting come into play. So the points that the right hon. and learned Gentleman lays before the Committee apply not to the triggering of sanctions but to identification of the breach, which is subject to unanimity.

Mr. Howard: I am afraid that the hon. Gentleman has overlooked one fundamental provision in the article. The initial decision is taken on the basis of unanimity, but not including the country against which the complaint is


made. So that country would be at the mercy of all the other countries. That is the point. Nor will it do to claim that article F.1 is simply a precaution against the sudden collapse of democracy in a member state. If one of our fellow members were to fall into dictatorship, surely the logical response would be to end its membership of the EU. Article F.1 provides no mechanism for doing that. On the contrary, it specifies that the state in question would remain bound by all treaty obligations, while losing its rights. That is not the right way to deal with an undemocratic regime. So we are forced back to the conclusion that article F.1 could be used to disarm the national veto of any country that was holding up a measure that the other countries wanted.
I invite hon. Members to play through logically a scenario in which article F. 1 would be put to the purposes for which Ministers claim that it was designed. Let us imagine that a new member state with a short tradition of democracy fell into dictatorship and took to persecuting its national minorities, arbitrarily confiscating private property or suspending the due process of law. Can anyone imagine that in those circumstances the other member states would want that state to remain within the Union? When we come across serious and persistent abuses of human rights in non-member states, as we did tragically in the former Yugoslavia, our response is not to invite the perpetrators of abuses to join the European Union, but without voting rights. Our response is to apply a series of sanctions and to make it clear that such behaviour is incompatible with an ambition to join the European Union.
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When the Commission delivered its opinion on the various pending applications for membership of the EU, a proven record of respect for human rights was rightly one of the prerequisites. So how do we imagine that, in a scenario such as I have outlined, article F.1 would be of the slightest use?
It is instructive to contrast the Government's attitude to article F.1 with their attitude to incorporation of the European convention on human rights. In their White Paper, the Government make much of their refusal to give judges the direct power to strike down Acts of Parliament. Such a power, they say, would be incompatible with parliamentary sovereignty. Yet in the Bill now before the Committee the power to interpret human rights is transferred from Parliament not to British judges but to European politicians. So much for the Government's supposed attachment to the sovereignty of the House of Commons and those who send us here.

Mr. Gapes: Does the right hon. and learned Gentleman agree that, if the EU is to be enlarged, it will need safeguards to ensure that all member states remain democratic? If so, should he not be a little more circumspect about his condemnation of the new articles which relate to human rights? They were introduced to ensure that the EU maintained a membership composed entirely of democratic states which respect human rights.

Mr. Howard: I have just indicated to the hon. Gentleman the way in which that is to be achieved.

Of course he is right. Of course we have to ensure that the EU continues to be composed of fully democratic states. The way to do that is, first, to require a track record of respect for human rights before a country's application is accepted and, secondly, if—alas, and against our expectations—a country falls into dictatorship, to say that that is incompatible with continued membership and that it will have to leave the Union. That is the way to do it—not by depriving a country of its rights while holding it to obligations.
Article F.1 therefore flies in the face of precedent, and especially of our constitutional tradition. It provides a mechanism whereby the national veto could be decommissioned by other politicians without the possibility of appeal to any judicial body. With all those constitutional objections, the Government have not been able to point to a single scenario in which the power could properly be used. In agreeing to article F. 1, the Government showed themselves either ignorant or disdainful of the fundamental principle of our constitution.
The Labour Government were elected on a specific promise that they would resist any dilution of the British veto in foreign affairs and defence. When the Prime Minister returned from the Amsterdam summit he claimed to have forestalled any moves towards deeper integration in those areas, but hardly were the words out of his mouth than the Dutch Government, who then held the presidency, put precisely the opposite construction on the summit, hailing it as a positive step towards a common defence policy. Who is right? One does not have to be a lawyer to see that the text of the new treaty brings an integrated European defence policy closer than before. The treaty refers explicitly to the
progressive framing of a common defence policy.
It goes on to deal with integration of the Western European Union into the European Union.

Mr. Desmond Swayne: May I draw my right hon. and learned Friend's attention to the fact that article J.7 of the Maastricht treaty, which becomes new article J.4, refers to the "eventual" framing of a common defence policy, whereas the Amsterdam treaty refers to "progressive" framing. The clear intention is that, from ratification of the treaty, the common defence policy begins.

Mr. Howard: My hon. Friend is right to identify that important difference between the two treaties.
The treaty of Amsterdam declares that
the WEU is an integral part of the defence component of the Union
and provides that
the Union should accordingly foster closer institutional relations with the WEU with a view to the possibility of the integration of the WEU into the Union.
Again, that suggests that Amsterdam brings us closer to a common defence than before. The Prime Minister claimed to have ensured that NATO would remain the basis of Europe's defence. He has ensured nothing of the kind. The reference to NATO under the second pillar was inserted not at Amsterdam but at Maastricht.
Let us take a step back and consider what role the European Union ought to have in the field of foreign and security policy. Of course, the member states of the


European Union will have many interests in common. There is a role for a common foreign and security policy in safeguarding and advancing those interests, and that is a role in which this country can play a prominent part; but for half a century the peace and security of Europe have been guaranteed by NATO—perhaps the most successful alliance in history. NATO is founded on the democratic and liberal values that are common to its members. Those are not exclusively European values: they unite the whole of the western world.
The importance of NATO is not only political, but military. The European allies alone lack the air and sea capacity, the missile defence, the advanced communications satellites and the military computers provided by the United States. There can be no more harrowing demonstration of the danger of seeking to exclude the United States from allied action or taking such action without the United States than the conflict in the former Yugoslavia. It is therefore essential that any development of a common security policy should not in any way impair the effectiveness of NATO, nor should it seek to duplicate what NATO does so effectively.
The common foreign and security policy of the European Union should strengthen the European pillar of NATO. It should allow Europe to take on a more equitable share of the costs of its own defence, and it should provide a forum in which common interests can be discussed. During the course of this debate, I hope to get from the Government a clear statement of their vision of the role of the common foreign and security policy. How do they see its relationship with NATO? How can duplication of NATO's work be avoided? How can they justify the remarks made by the Prime Minister on his return from Amsterdam? I hope that the Minister will cover those points fully in his response to the debate.

Mr. Menzies Campbell: The implication running through what the right hon. and learned Gentleman has been saying for the past minute or two seems to be that there are no circumstances in which Europe should act alone. Was not the concept of combined joint task forces a recognition by the whole of NATO that there were circumstances in which the European nations would act alone and would be provided by the United States with the very resources to which the right hon. and learned Gentleman referred, without the United States taking an operational role?

Mr. Howard: That can all be done within the context of NATO. The implication that the hon. and learned Gentleman identified was not intended. It is true that there might be operations such as those to which he referred, but they can take place perfectly well within the context of NATO.
It is also important to bear in mind that the implementation of decisions under the common foreign and security policy is to be decided by qualified majority vote. Given the new structure of decision making set out in the Amsterdam treaty, how does the Minister envisage the operation of qualified majority voting?
Suppose, for example, that a general resolution was passed by unanimity calling for action to be taken in certain circumstances against Iraq. Suppose that that was followed up by a resolution passed by qualified majority vote calling for the implementation of the resolution by

all measures short of the use of force. Suppose that the United Kingdom considered that the use of force was justified. Would it be precluded from using force in those circumstances? Those are vital questions, and I hope that we will hear some answers from the Minister this evening. It is because of our concerns about those issues that we have tabled new clauses 37 and 38, which seek to give Parliament an enhanced role in the consideration of such matters.
The Minister also has questions to answer in relation to articles K.12 and K.15. They contain the provisions on closer co-operation between member states when not all 15 wish to proceed. In principle, I welcome those provisions: they provide a basis for a different approach by different member states that reflects the differences which inevitably arise as a result of different national circumstances. However, as the Minister will be aware, the previous Government always insisted that the decision as to whether such actions could proceed should be taken on the basis of unanimity. The provisions in the treaty on this question are not straightforward: they might appear to provide for a kind of unanimity, but it is not at all clear whether they in fact do so. They are to be found in Article K.12.
I have a number of questions to put to the Minister on the provisions of that article. First, was it indeed the intention that decisions on that subject should be taken on the basis of unanimity? If so, why was there not a straightforward provision to that effect rather than the circuitous route we find in article K.12? That article provides that the decision should in fact be taken by qualified majority, except where a member of the Council declares that,
for important and stated reasons of national policy",
it intends to oppose the granting of an authorisation by qualified majority.
Is the action of a member state in that position subject to the jurisdiction of the European Court of Justice? Could the court rule that the reason relied on by the member state in question was not in fact "important"? If so, does that not mean that any appearance of unanimity would in fact be illusory? Those are crucial questions, and I hope that we can receive clear assurances from the Minister today.

Mr. William Cash: Does my right hon. and learned Friend agree that there is absolute absurdity in the idea that a common foreign and security policy should be subject in any way to the jurisdiction of the European Court of Justice? Imagine a situation in which we are moving towards a crisis such as the Gulf conflict. The court should have no role whatsoever in determining questions relating to control and command in such an emergency.

Mr. Howard: Were it the case that the European Court of Justice had jurisdiction in such matters, my hon. Friend's strictures would be entirely justified. He will no doubt put that question to the Minister himself.
Article 1 of the treaty of Amsterdam represents an unnecessary move towards further integration of the European Union. It contains a series of measures that transfer powers to Brussels from the national Parliaments of the member states of the European Union. I have touched on some of those points and my hon. Friends will


touch on more of them during the debate. Perhaps, more than anything, the treaty reflects a failure on the part of the Government of the United Kingdom.
On measure after measure, the Government failed to press their case, failed to persuade our European partners of the merits of the argument and failed even to try. Why? Because they feared isolation. That attitude goes back to that phrase used by the Prime Minister in his first speech to the Labour party conference as leader of the party, when he promised that he would never be isolated in Europe. In the Government's view, the fact that there was no support for their proposals from other member states meant that the points were not worth pursuing. That approach augurs badly for the future—badly for Britain and badly for Europe.
The truth is that the only real achievement to come out of Amsterdam was our opt-out on common immigration and frontier policies—and that was all thanks to the efforts of a Conservative Government. We shall not hesitate to press our reservations about article 1 of the treaty in the Division Lobby at the end of the debate.

Mr. Ted Rowlands: It is tempting to follow up on the host of issues raised by the right hon. and learned Member for Folkestone and Hythe (Mr. Howard). It was a little like hearing the speech that he would have made if there was to be a referendum on the treaty. It is noticeable that the referendum on the treaty has disappeared—perhaps it will reappear in a new clause to the Bill. Assuming that it does not, at least we have heard a rehearsal of what might have been said.
I shall confine my observations to a single paragraph of the revised article 1, which lists the objectives of the European Union, including the achievement of "a high level of employment". I welcome that assertion and the consequential employment chapter of the treaty, but I would examine more closely the objective and the revised wording to find out how much substance they contain.
Much emphasis has been placed on that wording by Ministers and by those who feel that they have achieved a great deal in the revised version of article 1, paragraph 9. It has been described as a vital re-balancing of the Union's objectives and priorities. It is claimed that the Amsterdam treaty remedies the omissions relating to employment in the Maastricht treaty.
I believe that that was the claim made by my right hon. Friend the Foreign Secretary when he came before the Foreign Affairs Select Committee to discuss the Amsterdam treaty—I do not think that I bowdlerise his views. In his evidence to us, he said:
it would be rather odd if we ended up with a Treaty of the European Union which gives specific tough targets on deficits, on inflation or on interest rates… but made no reference and offered no commitment to employment".
That statement was supported by later remarks by my right hon. Friend. It is clear that the provisions in the article and the references to high employment, followed by the employment chapter, are meant to balance the Maastricht treaty in terms of employment.
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My right hon. Friend the Foreign Secretary also said that the commitment to a high level of employment seemed to be

a very necessary corrective balance.
Ministers regard the employment provisions in the Amsterdam treaty, including the wording in the revised article, as balancing the Maastricht treaty.
One of my hon. Friends on the Committee questioned my right hon. Friend the Foreign Secretary on the significance of those words and the value of the employment chapter. He wondered whether they might be window dressing or a means of fobbing off. My right hon. Friend rightly said that putting in the same context as Maastricht the commitment to a high level of employment constituted a
very valuable and very important step
Anybody reading the evidence seems to be invited to compare the strength of the employment provisions in the treaty of Amsterdam and the monetary union provisions in the treaty of Maastricht. If one reads all the evidence given to the Select Committee, one can only draw the conclusion that significance is attached to the words "a high level of employment".
An official added to my right hon. Friend the Foreign Secretary's observations and drew a specific comparison between the employment provisions in the treaty of Amsterdam and the monetary provisions in the treaty of Maastricht. Mr. Gass at the Foreign Office said in evidence:
Could I add one point… of course, the arrangements under the employment chapter in relation to employment guidelines follow quite similarly the arrangements under the economic and monetary union chapter of the Treaty of Maastricht for economic guidelines. There is a similarity of method behind those two things, they are not binding.
We are invited to compare the strength and significance of the employment provisions in the treaty of Amsterdam with the monetary union provisions in the treaty of Maastricht. It is exactly that point that I am seeking to draw to the Committee's attention this evening. I want the Committee to make such a comparison. The only trouble is that, when I make the comparison, I find the contrast, not the similarity, between the two provisions most striking.
Those of us who are veterans of the Maastricht treaty debates of the last Parliament will vividly recall the treaty's monetary union provisions. They define criteria, describe the processes and establish means of enforcement. As my right hon. Friend the Foreign Secretary said, "specific, tough targets" were established to achieve the monetary union.
I studied the employment provisions, particularly the account in article 1 of the term "high employment". I looked in vain for anything like the equivalent of the monetary union provisions, or even for any definition or any criteria by which I could assess whether high employment had been or would be achieved in the time scale envisaged by the treaty.
Having been invited to compare the two sets of provisions in the two treaties—as we were by all the evidence given to us and by the presentation of the employment provisions in the treaty of Amsterdam and the monetary union provisions of the Maastricht treaty— I should at least have hoped to find a definition of high employment or a target or criteria to balance the monetary union provisions in the Maastricht treaty. Sadly, although I hunted high and low, I did not find a definition, a target or a criterion.
We included in the new provisions of the treaty of Amsterdam the reference to high employment—I believe that the Maastricht treaty also contains such a reference, although my right hon. Friend the Foreign Secretary challenged me on that, and I have not had a chance to do my homework.
What will the definition of high employment be? The present employment levels in the European Union are nothing to cheer about. One striking feature of our debates is that we have so often been told about the economic performance of the European Common Market, Community, through to Union. When I consider its performance over the past quarter of a century, I do not find much to give me comfort—that is certainly true when I compare its performance with that of countries that have been more successful.
What about the employment success of the European Union? I understand that, at present, only 60 per cent. of those of working age in the European Union are in employment; less than 40 per cent. of those between 16 and 24 are in employment; only 35 per cent. of those of working age between 55 and 64 are in employment. Are those figures defined, under the terms of the treaty, as high employment or do we have to achieve higher employment? If so, how much further do we have to go? What is the objective? What is the definition? What are the criteria? Having decided to include an objective of high employment, by which criteria do we judge it?

Mr. Llew Smith: Let us assume that we join the single currency, hand over many of our powers to the European central bank and, instead of achieving high levels of employment, face high levels of unemployment: what powers would we have as a democratically elected Parliament to alter that situation? Would my hon. Friend care to comment on article 107 or article 109 of the Maastricht treaty, which makes it illegal for democratically elected institutions—whether they be councils, assemblies or Parliaments—to try to influence the undemocratic and unelected European central bank?

Mr. Rowlands: On the latter point, I think that when I was in opposition I often expressed my feelings on the monetary union provisions in the treaty of Maastricht. I was one of the hon. Members who did not vote for the Bill that implemented the Maastricht treaty. I share some of the considerable concerns expressed by my hon. Friend about the employment consequences of monetary union.
The employment chapter remains the responsibility of national Governments in many respects; but, as my hon. Friend suggested, what if one of the consequences of monetary union were to be a rise in unemployment in many parts of the European Union? Which would take precedence—the monetary union provisions or the high employment objective?

Mr. Cash: Has the hon. Gentleman had the opportunity to read the paper on foreign affairs presented by Martin Feldstein, professor of economics at Harvard and president of the National Bureau of Economic Research? We should not forget that the United States is an important part of the problems that face the future of the European Union. In that paper he states:
a political union of European nations is conceived of as a way of reducing the risk of another intra-European war among the individual nation-states. But the attempt to manage a monetary union

and the subsequent development of a political union are more likely to have the opposite effect. Instead of increasing intra-European harmony and global peace, the shift to EMU and the political integration that would follow it would be more likely to lead to increased conflicts within Europe and between Europe and the United States.

Mr. Rowlands: As in previous debates, the hon. Gentleman tempts me to wander. I do not have the information from that article at my fingertips, and I should like to limit my observations to one paragraph in article 1, but I am sure that the wider issues raised by the hon. Gentleman will be discussed later.
We need to know what the definition of high employment is if its attainment has now been inserted as an objective in the revived article 1 of the treaty. I have quoted the latest employment figures in the European Union which reveal that just 60 per cent. of the working age population is in employment. Contrast that with the same figure for the United States or Japan, where it approaches 75 per cent. Is that figure a proper and reasonable definition of high employment for the purposes of the treaty? If so, it shows how much of a mountain we have to climb and how divorced reality is from the objective as stated in article 1.
The words are in the Amsterdam treaty, but what do they mean and how will we measure progress towards the stated objective? We know about the criteria, objectives and endgame associated with monetary union—they were laid down as specific tough targets in the treaty—but the opposite applies when it comes to the commitment to high employment in the treaty.
I have quoted the figures on general employment levels in the European Union, but the regional disparities in unemployment levels in the existing membership of the union are enormous and astonishing. Article 1 refers to the need for social and economic cohesion, but consider what is happening in reality. I accept that the gap between gross domestic product per capita and employment levels is closing when one compares nation states, but the interesting graph is that which reveals that disparities among regions in each nation state are growing alarmingly. I happen to represent one part of one of those so-called peripheral communities in the European Union which vividly illustrates the existence of such disparities.

Mr. Christopher Gill: Surely what we need to understand about unemployment is that, every time this country has had fixed exchange rates, unemployment has gone up exponentially. It increased from 1.67 million in 1990 to 2.85 million in 1992, and from 1.25 million in 1925 to 2.9 million in 1931. I should have thought that that was something that everyone could understand. I cannot understand why Labour Members sitting alongside the hon. Gentleman are not as concerned as I am about that precedent, which is so clear for all to see.

Mr. Rowlands: I represent a community that understands exactly the impact of fixed exchange rates and gold standards on the economy and jobs. I shall refer to that in greater detail later. We know what impact such policies can have on peripheral communities that face structural difficulties, as my community did in the period between the wars and again in the 1980s and the early 1990s.
I am not seeking to make a Welsh point, let alone a Merthyr Tydfil and Rhymney point; I am talking about all the peripheral areas within the European Union. The


relevant graphs are interesting, and I believe that they are as accurate as any, because they show that, whereas the gap is closing between the relative GDP per capita levels of nation states in the European Union, huge regional disparities are emerging; in other words, the peripheral areas of the European Union are suffering greatly. The figures reveal that the GDP per capita of a quarter of the present European Union is less than three quarters of the European Union average.
I was astonished to discover that, if one were to apply the criteria for objective 1 status to the United States, just Mississippi and one other state would qualify for it. I can hardly believe that. As a member of the European Union and the Common Market, we should display some humility when reviewing our relative economic performance and employment growth in the past 20 years. We should not believe that the European Union has been a wonderful economic panacea.
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According to the objective set down in the treaty, we are also asked to believe that social cohesion and high employment will be achieved through economic and monetary union, "ultimately including" a single currency. Those two words are not new, because they were included in the Maastricht treaty. Even when we debated that treaty, I was curious about how the ultimate inclusion of the single currency fitted in with everything. I thought that monetary union was equivalent to a single currency. I thought that one could not achieve monetary union without a single currency; but, according to the revised article, it now appears that a single currency is an optional extra. We are invited to support the notion that communities like mine will achieve high employment and social cohesion through monetary union and a single currency.
The language used is fascinating. We, in common with Conservative Members, now laud flexible labour markets and the possession of flexible, adaptable skills. We now denounce old-style corporatism and all forms of intervention. We have marginalised the role of public expenditure and have introduced treaty-based draconian laws not to borrow more than a certain percentage. We now believe in flexible labour markets, but inflexible exchange rates. We believe in a monetary union that is corporatist to its toes. Everything described in the treaty is corporatist. What could be more interventionist than the stability pact that backs up that treaty and has the power to fine nation states if they err?
I am an historian, not an economist, and I can find no empirical or historical proof that all that 3 per cent. deficit stuff in the Maastricht treaty has any particular sacred, eternal, validity. We are asked, however, to support such a principle.

Mr. Bowen Wells: If, as the hon. Gentleman has said, we enter an inflexible monetary union, and changes are taking place in the economies of peripheral areas—I suggest that it is not only Wales that is a peripheral area in terms of monetary union but all of the United Kingdom—is it not true that the only way in

which adjustment could take place within such a fixed monetary union is through high unemployment in those peripheral areas?

Mr. Rowlands: There are two or three ways in which adjustments could take place. First, there might be a significant transfer of resources. The problem is that the only way to achieve such transfers on a scale large enough to be effective would be to create a unitary or federal government capable of taxing and therefore redistributing resources.
The second way in which adjustments might take place was mentioned by the hon. Member for Hertford and Stortford (Mr. Wells) in an intervention. It was the way that partially solved, but in the cruellest way, the problems that once confronted the communities that I represent: large-scale movement of people from peripheral areas. In 1928, it was called transference; the Government of the day set up a board to promote transference. Presumably there might be a European transference board to move the population within European Union to where the work is—a massive European bike ride, if Lord Tebbit will forgive me.
Without the flexibility of exchange rates, there will be higher unemployment in peripheral regions.

Sir Raymond Whitney: On a point of order,Mr. Martin. The hon. Gentleman is giving us a very interesting discussion on economic and monetary union. I am not aware that it is a subject of the amendment or of the Bill.

The First Deputy Chairman of Ways and Means (Mr. Michael J. Martin): I draw the hon. Gentleman's attention to the fact that amendment No. 1 refers to economic and monetary union, so he is perfectly in order.

Mr. Rowlands: Thank you, Mr. Martin. Monetary union is referred to in article 1, whose inclusion in the Bill we are debating, and in amendment No. 1. Although we cannot move the amendment, I am discussing that amendment, which I tabled.
I am sceptical of that fine belief that monetary union will achieve high employment—that through full monetary union we shall achieve the social and economic cohesion that we all want. I find the notion of a 21st-century European gold standard—which I think is what monetary union is—as potentially dangerous for the future of my communities as the gold standard was to my communities between 1925 and 1932.
One should re-read the history of that period. One should not become a prisoner of one's history, but one should at least re-read it and realise that the only post-war period of full employment in Britain did not result from a gold standard or very fixed exchange rates of the kind and character proposed for monetary union.
I feel strongly about this subject. If we believe in the concept of high employment, we have cause to be worried—as I am—that some of the aspects of the treaties that we are discussing will not enhance job prospects and bring about high employment in the communities that I serve, but will destroy them.

Mr. Cash: I should like to approach the debate from the position that I believe the Conservative party genuinely represents, which has been gravely


misinterpreted and misconceived by many people—not only Labour Members, but the media and some of the malcontents in the European Union.
The views that have been expressed by the Conservative party day in, day out on these fundamental issues—the add-on to the development towards what is called an "ever closer union", but which I believe is an ever-increasing division within Europe—may be encapsulated as pro-European views. It is a gross misrepresentation of our position to describe the views that we advance as Europhobic or anti-European. There is absolutely nothing Europhobic or anti-European in those views, and it is a gross calumny on the Conservative party that such descriptions continue to be expressed.
I pay a deeply felt and emotional tribute to many Labour Members, including the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). They genuinely believe in the national interest. We may differ about where we would go if we retained our ability to take decisions for ourselves, but the idea that those of us who seek to maintain the national interest in a manner consistent with a policy that genuinely represents the interests of Europe as a whole—and have tried to present such arguments over the years—are Europhobic or anti-European is a gross calumny.

Mr. Ian Taylor: I cannot resist an intervention—bring back the old days of the Maastricht treaty debates. I warmly welcome my hon. Friend's remarks; he has obviously become a positive European. In that context, will he warmly welcome the very positive statement made by our right hon. and learned Friend the shadow Foreign Secretary, who said that, in achieving the development of the European Union and especially of the single market, it was essential that there was a supranational court—the European Court of Justice?

Mr. Cash: My hon. Friend may be surprised to know that, about two years ago, I had a debate with the present Lord Howe before the Bar Council in which, to his astonishment, I actually agreed that, if one were to have certain rules that were applicable in the interests of co-operation within Europe, it was necessary to have a court of justice, which would arbitrate sensibly in achieving objectives that were in the interests of Europe as a whole.
Unfortunately, for reasons that I gave in that debate, I am afraid that, as Sir Patrick Neill said in his essay on judicial activism, the European Court of Justice has departed from that policy of arbitration and has engaged in a policy of political activism—judicial activism, if you like—which has led to serious problems. However, I do believe that, if one is to have a rule of law within Europe and it is to be for the benefit of all the member states, it is in the interests of everyone to have an arbitrator, and the European Court of Justice, if it were to behave properly, could achieve that objective.
At the heart of this very important debate lies the fundamental question of article 1 and the manner in which it traverses all the issues contained in the Amsterdam treaty. I suspect, looking at the Minister of State, with his foxy eyes, that he will—

The Minister of State, Foreign and Commonwealth Office (Mr. Doug Henderson): I will be hunted.

Mr. Cash: I suspect that he and the Foreign Secretary will impose a guillotine, and I have no doubt whatever

that they will seek to blame us. I say to my right hon. and learned Friend the shadow Foreign Secretary and the shadow Minister for Europe, my hon. Friend the Member for South-West Devon (Mr. Streeter), that we are interested in a proper debate, as are all Opposition Members present. I regret the lack of hon. Members in the Chamber, given the importance of the subject.
I place on the record the fact that there is no need for the European Union to make the inevitable progression to a legal federal system. I shall quote briefly from one of our greatest statesman, John Bright, who, in his last speech, asked whether there was any need for a legal federal system within the empire of the United Kingdom and what later became the Commonwealth:
May we not hope for the highest and noblest federation to be established among us? That is the question to which I would ask your special and sympathetic attention. The noblest kind of federation among us, under different Governments it may be, but united by race, by sympathy, by freedom of industry, by communion of interests and by a perpetual peace. We may help to lead the world to that better time which we long for and which we believe in, though it may not be permitted to our mortal eyes to behold it.
It is thus far better to achieve peace, stability and higher employment by co-operating as sovereign states than to lock ourselves into the arrangements proposed in the Amsterdam treaty. Incidentally, with great respect to our Front-Bench spokesmen, I might add that I strongly believe that the Maastricht treaty should be renegotiated.

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Mr. Casale: The hon. Gentleman says that he wants a proper debate. If that is so, why does he insist on tabling amendments that would scupper the treaty? Why not re-focus the debate on areas susceptible to serious discussion, instead of trying to undermine the Bill altogether? Or is he seeking to project into the Chamber a debate that is taking place only within the Conservative party?

Mr. Cash: Having just heard the brilliant speech by the hon. Member for Merthyr Tydfil and Rhymney, I am well aware that there are differences of opinion in all parties. It is the national interest at stake; the debate should not be defined in terms of party political interest. That is precisely why we have tabled our amendments, in fact.
The hon. Gentleman will understand that we cannot amend the treaty; all we can do is probe and ask questions about why certain provisions have been included. There is nothing negative about the views that we are expressing. I notice the hon. Member for Rotherham or somewhere— or is it Zurich?—holding up his Order Paper. He knows perfectly well that on occasion it can take up to 100 amendments to elicit the truth.
I want to examine the issues covered by article 1, which divide easily into a number of categories: social policy, common foreign and security policy, the free movement of peoples, immigration issues, border controls, freedom, security and justice, the single currency, police and judicial co-operation, and the general subject of flexibility and the Court of Justice.
There is no doubt that social policy will be a source of discord, tension and conflict in Europe. To anyone who doubts that I would recommend the essay by Martin Feldstein. Social policy also poses dangers for our relationships with the rest of the world, and for the


investment that we want to come into the UK and Europe. The plain fact is that, without restrictive social policies, in the past 20 years the United States has generated another 36 million jobs, especially in small and medium-sized businesses. At the same time, Europe, with its restrictive and sclerotic practices, has at best produced 1 million more jobs—although other estimates put the number at zero. Therefore, it reflects no credit on the Government that they should be endorsing the social chapter.
As Patrick Minford has pointed out in an important paper that he wrote for the Official Journal of the European Communities, unemployment in this country alone is set to rise by as many as 3 million, and our GDP to fall by as much as 20 per cent. The Government are, of course, free to challenge the Liverpool model, but I cannot believe that they intend to pursue this sort of policy merely to appease the European Commission. Do the Government not realise that the policies I have described will lead to the people who voted for them on 1 May disappearing like snow in spring? They will have no chance of holding those voters in the next election if they continue to pursue these policies.
I initiated a recent debate on the coal industry; yesterday, a Labour Member had a debate on that same industry. Certain policies being pursued by the EU and advocated by our Government will definitely lead to more unemployment. It gives Conservative Members no satisfaction to realise that the policies pursued by this Government will be against the national interest. They may be worried about losing votes, but it is more important to realise that these policies run clean counter to the national interest.

Mr. Richard Shepherd: Essentially, my hon. Friend is saying that he passionately believes in a Europe of nation states, but that that is not on offer from anyone across the channel. This boils down to a fight against Labour Ministers, who believe in the creation of a European state that will mean that the vital powers of the British people to make and live under laws which they can choose and change will be removed from them.

Mr. Cash: I absolutely endorse my hon. Friend's comments, and I beg the Government, with their huge majority, to act responsibly—even if it is for reasons of self-interest. What matters, of course, is the national interest, and following the ideology underpinning the social chapter will lead to ever more trouble for the people we represent. Indeed, that is why we are in the House—it is time we brought some passion and fire to the European questions that affect the lives of the voters.

Dr. Palmer: As the community of separate nation states that the hon. Gentleman would favour is not on offer, is not the logical extension of his argument a complete withdrawal from the European Union? By the way, has everything he has said today represented the policy of the Conservative party?

Mr. Cash: So far as I understand it, the policy of the Conservative party is to oppose the Amsterdam treaty, and that is the position we all adopt. Indeed, I am sure

that the shadow Foreign Secretary would leap to his feet if he thought I was disagreeing with party policy. The views that I am expressing are wholly consistent with the thrust of everything that the Conservative party, in Parliament and outside it, holds dear.

Mr. Jenkin: Is not the boot on the other foot? If the Government are not prepared to object to the progressive integration of Europe and the gradual removal of powers from member states' national Governments, they are necessarily complicit in the construction of a European super-state, to which they say they are opposed, but to which also they are turning a blind eye.

Mr. Cash: As ever, my hon. Friend is absolutely right. We should look at the big picture, because the totality of proposals under Amsterdam combined with Maastricht shows that we are moving towards a European Government. It is no accident that people such as Karl Lamers state that their avowed objective is to have one country. If we move from a single market to a single currency and to a single tax policy, there will no longer be an individual nation state.
I challenge the Minister and Labour Members to deny that Britain is an independent, sovereign state. Let the Minister say at the Dispatch Box that we will not be an independent, sovereign, nation state. Is he prepared to say that? He knows as well as I do the direction in which the Amsterdam treaty is taking us. The arrangements for the corpus juris proposed by Directorate General XX— a common legal area—are concomitant with one single currency, one single tax policy, one country. The Government are showing their complicity by allowing that to happen.
I defy the Minister to deny that that is the direction in which we are going. The Government know perfectly well that that is what it is all about. The Minister looks so uncomfortable as he sits there. Just look at him. He dare not get to his feet, because he knows that that is the position.
What is the effect of a common foreign policy on our affairs? Some people believe that a common foreign and security policy is in the interests of a greater, more united, coherent approach to foreign policy in the European Union. There are practical difficulties. What happened in the Gulf and in Bosnia shows that such an approach did not work. Why have the Government endorsed the idea of high representatives, who would carry out a combination of the new secretary general's political functions and the political functions of the presidency, and who could set their own political agenda in association with the Commission?
Such manoeuvres are highly dangerous and essentially undemocratic. At the beginning of my speech, I said that we are for Europe, for jobs and for democracy. What on earth are the Government doing pursuing a policy that is bound to lead to unelected high representatives having as their function the binding together of policies on their own political agenda in association with the European Commission? That does not make sense. What on earth do we think we are doing?
We should not look back at history for its own sake, but we should consider the implications of these proposals. Surely the Government understand that, if common foreign and security policy is subsumed by the political agenda of unelected persons, it is bound to lead to difficulties for democracy. It is a retrograde step.
As Professor Feldstein has pointed out, this proposal will lead to massive tensions between this country and the United States of America. Who bailed out Europe over Bosnia? NATO and the United States. Why do we want to pursue policies that are inimical to the interests of those who have come to our aid in the first and second world wars, in the Gulf war and in Bosnia?
As for freedom, security and justice, we have a problem with the expansion of the legal area and the massive increase in the powers of the European Court of Justice. Why are no dissenting judgments published? Why does the court operate under such secrecy? It has a political agenda, and the electorates of the member states are not allowed to know who has decided what. That is not transparency.
I have read over and again that the European Commission is enthusiastic about transparency, and is more open. There is no evidence from the Amsterdam treaty that any attempt has been made to deal with that problem. It is a political court and is primarily driven by its own agenda, which is, by its own admission, political integration. That was expressed by Professor Trevor Hartley in a recent interesting paper. It is not an objective, judicial court: it is primarily a court of political injunction.
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Although I disagree with the new arrangement, in the Select Committee on European Legislation the other day, I asked the Minister to explain why framework decisions in the area of freedom, security and justice are dealt with exclusively by secondary legislation. He was in some difficulty: I noticed his embarrassment. He could not state categorically that all questions relating to framework decisions would be dealt with by primary legislation.
Why is there qualified majority voting for what is described as "the other decisions?" What are the other decisions? He looks at me across the Floor, but he will not answer my questions, because he does not know the answers. He did not know the answers in the Select Committee, so he kept referring to his civil servant. He will read out his brief tonight, but he does not understand what is going on. That is the problem.
Why does the European Court of Justice continue to confer jurisdiction on itself? Why did the Government not take a position on the treaty to ensure a proper trimming of the Court of Justice?
Fundamental questions lie at the heart of the debate, and the Government must answer them. They will not answer any questions, because they lack sufficient comprehension. I condemn the Government for the treaty. The Conservative party will vote against it, because it is fundamentally wrong and is not in the national interest. The Government know it, Labour Members know it, and they will rue the day that they allowed the treaty to go through.

Mr. Denzil Davies: My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) dealt brilliantly with the gist of amendment No. 1, so I shall be brief.
I did not want to discuss the European Court of Justice, but I shall just make a few comments. I recognise that a European Union has to have a supreme court. The hon. Member for Stone (Mr. Cash) was a little unfair when

he said that the court's agenda was political, and that it did not want people to know anything. The problem with the present court is that its antecedent is the Napoleonic French state court. The European Court of Justice was set up at about the same time as the European Coal and Steel Community—a particularly authoritarian organisation. It would be more sensible to use the different and more flexible procedures of other courts in Europe than the French state court procedure that the European Court of Justice uses. I suggest that we examine the court's procedures and consider whether they can be reformed to accord with continental practice in other countries, and with British practice.
The amendment would exclude certain words in article 1 that refer to economic and monetary union and ultimately a single currency. A technical question has been bothering me and I shall set it out before coming to the substance of my speech. I understood that the purpose of the Bill was to incorporate Community obligations into English law. Indeed, if there were no such obligations, it would not, in theory, be necessary to have a Bill. As we know, the royal prerogative enables a Government to ratify a treaty. Presumably, certain provisions in the Amsterdam treaty have to be translated or incorporated into the law of England and Wales, Scotland and Northern Ireland—the United Kingdom. That being so, a Bill is necessary.
Article 1 refers to economic and monetary union and the single currency, the latter being stage 3. Those of us who participated in the debates on the Maastricht treaty are well aware that the single currency is the third stage of economic and monetary union. I had always understood that the United Kingdom had an opt-in, not an opt-out. Until we opt in to stage 3, if we ever do, how can that stage be a Community obligation for Britain?
On a technical level, the amendment seems absolutely right. Why do we need to bring into British law, English law—the law of the United Kingdom—an obligation that is not an obligation, if I may so describe it? Perhaps my hon. Friend will explain when he replies.
I see at the top of page 9 of the treaty the name" Mr. Douglas Henderson". He is said to have exchanged—I paraphrase—his full powers, which were found in "good and due form". I am glad to read that. The treaty tells us that he has agreed that
The Union shall set itself the following objectives".
There is then a reference to, ultimately, a single currency. As I have said, the United Kingdom is not part of the Union in the sense that it has agreed to the single currency. It is an opt-in, not an opt-out. There are therefore no obligations on the United Kingdom under stage 3 of economic and monetary union.
We are not subject to the stability pact. We are not subject either to the locking of exchange rates and the movement towards a single currency. I do not think that there are any legal obligations under stage 2, but there are definite legal obligations under stage 3. Why do we have to incorporate those obligations in the law of the United Kingdom when we are not bound by them until we accept them by opting in?
The question might seem to be technical, and perhaps it is an example of the pedantic points that lawyers like to raise. I shall be grateful if my hon. Friend the Minister is able to clear my mind when he replies and end my confusion.
My hon. Friend the Member for Merthyr Tydfil and Rhymney dealt eloquently with the phrase "high level of employment". Should anyone think that I am out of order, those words are contained in article 1. They appear a few lines up the page from the reference to economic and monetary union. My hon. Friend said that my right hon. Friend the Foreign Secretary said at a meeting of the Select Committee on Foreign Affairs, "No, it is all different now. We have a new treaty that includes the magic words 'high level of employment'." My right hon. Friend explained that the words were intended to show that we believe in employment. Apparently, they represent a grand counterweight to those nasty monetarists at the European central bank.
The few of us who debated the Maastricht treaty night after night know very well that magic words about a high level of employment appeared in that treaty. I think that they were part of article 2. Our debates were designed to show the distinction between the vagueness of those words and the specific targets of setting up, for example, the central bank and price stability.
All we have is more words. We have nothing that is really new, and we still have unemployment. Nothing has changed. The leaders of the European Union are faced with 18 million unemployed citizens, almost 5 million of them in Germany. It may be that there will be 5 million in that country later this winter. Faced with that level of unemployment, European leaders have wonderful meetings where men in extremely nice suits drive up in very expensive cars to pretend that they can create wealth by so meeting. They pretend also that they can do something about unemployment. Most of those men and women have never been unemployed. Most of them, like most of us in the House of Commons, have not created any wealth in their lives. However, the meetings continue.
I accept that the lawyers do very well. I should be in favour of the process because it is great for lawyers. The Holy Roman empire was great for administrators and various other people and the European Union is great for lawyers, who draft with great skill. I have great admiration for continental lawyers, who are able to convert rather vague concepts into the language of treaties.
As I have said, nothing has changed. I have no doubt that Mr. Jospin is happy with the drafting, because it enables him to show the socialist party in France that he has secured a sort of counterweight to the European central bank. In fact, he has achieved nothing, and he knows it. He is happy, however, to dress things up in an effort to show that the French Government were concerned about unemployment.
What does a "high level of employment" really mean? We are incorporating those words into English statutes, in effect. That being so, we are entitled to ask what is meant by those words. If 80 per cent. are employed and 20 per cent. are not, is that a "high level of employment"? The words are chosen so that we do not know the answer. They are examples of the classical words used by monetarists, and I count myself something of a monetarist.
I was converted to monetarism at the Treasury years ago by Denis Healey and Milton Friedman. It accords to some extent with my Calvinistic-Methodist upbringing,

which told me that too much money is bad for us. I speak as a little monetarist. A "high level of employment" is part of a philosophy because we are told that monetary policy is what matters and that whatever happens to employment is unfortunate. There is no attempt—perish the thought—to refer to full employment. That being so, we have no definition. If there is to be incorporation into English law—perhaps my hon. Friend the Minister will tell me if I am wrong—what is meant, as my hon. Friend the Member for Merthyr Tydfil and Rhymney asked, by a "high level of employment"? I think that we should be told.
Economic and monetary union and a single currency mean a single bank. They also mean something that is called price stability. That term appears in the Maastricht treaty, and I have always been baffled by it. What does it mean? At least the Bank of England has targets for inflation. We are told that the present target is 2.5 per cent. The latest Treasury document tells us that it will not be 2.5 per cent. next year or the following year, but that is another matter.
What is price stability? We are told that it is low inflation. Is it zero inflation? It is important to know, because Japan has had price stability for a long time. The inflation rate there has been between zero and 0.5 per cent. I suppose that that is price stability. It does not seem to have done the Japanese economy much good in the past few years. This European central bank is going to give us, as it has to, price stability, so what is it? Is it 1, 1.5 or 2 per cent. inflation? Again, we should be told what price stability means, because we are incorporating it into English law—or English and Welsh law, British law or UK law.
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I suppose that we have to have a central bank—or do we? I confess that, sometimes, I have radical thoughts. I had them in about 1976 when I was a junior Treasury Minister. I was not sure whether we needed a central bank at all. This is far too advanced and radical for new Labour Members, so I suggest that they stop up their ears. Indeed, I see one of them doing it already.
I wonder about the European central bank. It is not going to have much effect on long-term interest rates. No central bank does any more; long-term interest rates are determined by the market. However, central banks and the European central bank know all about short-term interest rates. They know how to fix the rates to hit an inflation target or to create this nirvana of price stability. I am not sure whether global capitalism can survive price stability or zero inflation, but perhaps we should not be led into that argument now.
Why do we need the central bank—those 10 men sitting there trying to fix an interest rate for a region stretching from Merthyr Tydfil and Rhymney, or west Wales, almost to the Arctic circle? Poor old Eddie George is having problems fixing an interest rate for Britain. If there is growth in the south-east, apparently, interest rates have to go up, but there is no growth in Merthyr Tydfil and Rhymney or in Llanelli, so how do we compensate for that? Why cannot Llanelli have a lower interest rate than the City of London?
How do we fix one interest rate for the whole of Europe? It is absurd to establish a body that apparently has all the powers and is an institution. It is like the


European Court of Justice. It is not like the little committee that has been set up—I do not know where— to deal with employment, but is a joint committee of the Council of Ministers and the European Parliament. It will consider guidelines and consult the Committee of the Regions, and spend a lot of money doing nothing.
We had the European Commission, the European Parliament and the Council of Ministers—the troika of the European Union—and now we have a fourth: the European central bank. It is a troika plus one. This new institution will determine interest rates—and employment levels—and it cannot take into account other matters such as employment because the treaty says clearly that it cannot.
The Maastricht treaty says:
The primary objective of the ESCB shall be to maintain price stability. Without prejudice to the objective of price stability"—
this is good draftsmanship—
the ESCB shall support the general economic policies in the Community".
The general economic policies are that we should have high employment, but it cannot take that into account, whatever that means, because it has to determine price stability, which is zero or close to zero inflation, so why on earth do we need it?
If Governments cannot achieve that aim, I would leave it to the marketplace. Some of my hon. Friends may be upset about that, but that is what I would do. Governments have to face the retribution of the electorate. There is retribution, they tell me, in the marketplace as well if we get it wrong, but the gentlemen in Frankfurt driving around in large cars, on eight-year contracts and an index-linked pension, are going to face not retribution, but a nice retirement after they have decided who has a job and who does not in the European Union.

Mr. Llew Smith: May I use an argument that my right hon. Friend made some weeks ago, but in another instance? If we have no confidence in politicians setting interest rates or public expenditure levels, and if that is now to be the responsibility of the European central bank, why do we stop there? Why do we not give it powers to determine taxation levels, what sort of health and education service we have, and how much we should invest in the social services?
Just a week ago, we celebrated the centenary of one of my predecessors, Nye Bevan. Politicians from left, right and centre were queuing up to say what a wonderful man he was, which he certainly was, but do we honestly believe that a European central bank would ever have had the courage, imagination or initiative to set up the national health service?

Mr. Davies: My hon. Friend is right. I shall not follow him, as I can see that the occupant of the Chair is getting restive, but obviously there are possibilities. Once we have a central bank, we have an Exchequer board to determine public expenditure levels and taxation. Perhaps we saw the germs of that now in the statement of my right hon. Friend the Chancellor of the Exchequer the other day.
In his excellent speech, my hon. Friend the Member for Merthyr Tydfil and Rhymney mentioned corporatism, perish the thought. We old Labour Members in the

previous Labour Government were accused of terrible corporatism, and we are still accused of all sorts of things: running the economy badly, being too corporatist and everything else. Fair enough: we accept those criticisms. We are now supposed to be living in a flexible world, a global economy, yet we belong to the European Union, one of the most corporate structures—I hate to say it again—since the Holy Roman empire. It is utterly and completely corporatist. It is there to determine, with institutions, treaties, words and lawyers, almost every facet of life—certainly of economic life. What can be more corporatist than that?
My hon. Friend the Minister often goes to Brussels and sits in this corporatist body, as do other Ministers and the Prime Minister. We are members of a large corporatist organisation, and I wonder sometimes whether this old-fashioned, indeed out-of-date, corporatist organisation can live with the global economy. I am not sure that it can. Something will fall apart, because it is the antithesis of the global economy.
Whether we like it or not, the global economy is there, yet we have this old structure—I am prepared to admit, this old Labour structure—in the centre of Europe to which we all subscribe and pay money. However, outside there is another world: the global economy, where Governments have to move quickly and be flexible, and where constitutions have to be flexible.
The good old British constitution fits well into the global economy. We are trying to dismantle it, but it suits that economy. This stuff that we are debating does not suit it, and I suspect that the treaty will not be able to cure unemployment and do the things that everyone wants. I suspect that the European central bank, price stability and all this nonsense will lead to deflation. Perhaps we shall have zero inflation, but if we do, even more than 18 million will be unemployed in Europe.

Mr. Jenkin: I do not intend to detain the Committee for long, because I want to ensure that we debate as many amendments and clauses as possible before the Government bring down the guillotine.
I had meant to talk about the European Court in conjunction with article 1, and about the importance of the amendments relating to the further centralisation of power; and I had meant to ask the Minister to clarify one part of the Government's policy. Are the Government in favour of the development of a federal Europe, or are they not? That is not a difficult question, and we need not get bogged down in arguments about what a federal Europe is. Some say that federalism is about decentralising power, but, if we started with that premise, we would not have moved any power from the member states to the federal institutions in the first place.
It is, of course, possible to centralise a certain amount of power in the institutions. Indeed, it was originally intended that the Community should take sovereignty from the member states in limited areas for the achievement of certain limited objectives—and it must be said that the European Economic Community, as it was then called, used to work extremely well on that basis. The objective of the single market was to consolidate the process, with the transferring of limited fields to the institutions to achieve free movement of goods, capital, people and trade within the single-market area.
The question that needs to be asked is whether the Government want the process to continue indefinitely, because that is what the European Community institution


are now involved in. The inclusion of the Amsterdam treaty in the treaty on European Union gives the process a considerable further kick in a federalist direction.
Let me ask the Government a simple question: are they in favour of an indefinite and continuing transfer of power and responsibility from the member states to the institutions of the Community? It seems from the fact that they have signed the treaty, and from the fact that they have addressed none of the issues raised by my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) about the operation of the European Court—the Conservative Government were going to insist on that—that this Government are indeed prepared to continue the process indefinitely.
It should be understood that it is not necessary to go on changing the treaties for that process to continue. May I detain the House for a moment to explain the doctrine of the occupied field? Every time a new directive is created or a new regulation is created and approved, the Community removes further competences from the member states, and centralises decision-making in European Community institutions.
Air transport is a classic example. It has been regarded as a competence shared among the member states and the Community, the presumption being that the Community should be responsible for air transport within the Community area, but should leave bilateral arrangements between member states and non-members to them. Now the former leader of the Labour party, the European Transport Commissioner, is trying to get hold of that system so that the European Community can take over the competence.
Once the Community has acquired a competence, it cannot give it back to the member states. It can delegate it, but, once acquired by the Community institutions, that power is permanently in the possession of the institutions. It is up to them to give member states permission to exercise it.

Mr. Cash: Will my hon. Friend give way?

Mr. Jenkin: I want to be brief, but I will give way.

Mr. Cash: Will my hon. Friend add to his simple and graphic description the acquis communautaire, which produces a continuous ratchet effect? It is no more possible to revisit the occupied field than it is to revisit the existing legal norms that have been created by the Community. It is an irrevocable process, with no right of secession.

Mr. Jenkin: I agree. My hon. Friend has amplified the point that I was making.
It was all very well for the Prime Minister, before the general election, to write articles in The Sun declaring his affinity with a Europe of nations—presumably sovereign nations—involving our working in co-operation with our European partners. However little our European partners are now prepared to explain the consequences of signing the treaties as they have been signed, and however shy even Helmut Kohl now is about discussing the federal Europe, the fact is that that is the legal construction of the treaties.
The European Community may not yet be a state; but I have attended debates such as this often enough to hear hon. Members describe one policy after another, and one aspect of the Community after another, that suggest that it will be. If it has an executive in the form of the Commission, a legislature in the form of the Parliament and the Council of Ministers, a supreme court in the form of the European Court of Justice, a foreign policy and a nascent defence policy—if it is to have a currency, and if it has citizens and borders and passports and even a national anthem and a flag—it would seem that the European Community is taking on all the attributes of a state.
Plenty of people seem to be prepared—nudge nudge, wink wink, say no more—to proselytise privately about the creation of something akin to a European state. I consider it incumbent on the Government to make it clear at the outset of our debates that that is not their objective. I challenge them to say that with courage, because, if they are prepared to make the statement, much will flow from it.
I have a large amount of text with me, to which I was going to refer; but I shall put it aside, because I want to support strongly what was said by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) and the right hon. Member for Llanelli (Mr. Davies). I do not wish to wreck their careers in the Labour party, but the sentiments they expressed about the economic consequences of joining a monetary union are exactly the sentiments expressed by my right hon. Friend the Leader of the Opposition when he addressed the Confederation of British Industry a week or two ago.
During one of those two speeches, one of my hon. Friends who was sitting near me—but who has now left the Chamber, so hon. Members will have to speculate about who it was—lamented, "These debates are going to be just like Maastricht." Sadly, they probably will be in some respects, because many of the issues that were raised in the Maastricht debates have not been addressed.
In many other respects, however, they will not be like that. The treaties may not reflect the fact that the exchange rate mechanism has collapsed since the Maastricht treaty text was agreed, and the fact that many other economic events have occurred. For example, the unemployment rate in the European Union has continued to rise alarmingly. The treaties, sadly, are constructed as though nothing had happened.
What I wanted to say about the excellent speeches of the hon. Member for Merthyr Tydfil and Rhymney and the right hon. Member for Llanelli is that the issue of centralisation of decision-making applies as much to the policies that I was going to discuss as to the policies of economic decision-making. The European Union is actually about the centralisation of decision-making, in limited but ever-widening fields, especially in relation to economic and monetary union. It is about diluting the effects of democracy, and the requirement for consent on the outcome of those decisions.

Mr. Oliver Letwin: Will my hon. Friend join me in a speculation prompted by the coruscating brilliance of the right hon. Member for Llanelli (Mr. Davies)? Might not the tendency that my hon. Friend is now describing so powerfully be carried to its ultimate conclusion, through the justiciability by the


European Court of the phrase "price stability"? That leads to the interesting speculation that the body that may set the target for interest rates in Europe could be the European Court.

Mr. Jenkin: My hon. Friend is tempting me to explore the operation of the court, a topic that I set aside for today's debate, but he is right—the operation of the central bank is ultimately subject to the European Court of Justice.
The question that I shall explore, which is relevant to the European Court of Justice, is the question of consent and accountability. Ultimately, the institutions of the Community will respond in one way or another to the unrest that is likely to ensue from the removal of democratic accountability through the removal of powers from the national Governments.

Mr. John Bercow: Does my hon. Friend agree that the proposed conduct of monetary policy by the European central bank will not only be economically damaging, but, more particularly, will conflict with the much-vaunted commitment of the European Union and the Amsterdam treaty to democratic principles? If the European central bank is to be prohibited from taking representations from national Governments about the conduct of that policy, and if national Governments are potentially subject to fines for seeking to make such representations, is that not the antithesis of democracy?

Mr. Jenkin: I wholeheartedly agree with my hon. Friend. I am surprised that a number of the new Labour independent central bank freaks are not jumping up and asking, "Are you not in favour of independent central banks, and is not the Bundesbank a frightfully successful institution?"
The answer is that there is no such thing as a truly independent central bank. Even though the Bundesbank, for example, has a large measure of independence in the setting of interest rates and the governance of monetary policy, it is an institution that enjoys the wholehearted consent of the people of Germany. Indeed, they love their central bank probably more than any of their politicians, and they respect it more than any of their other institutions. To that extent, the Bundesbank as a central institution of the German constitution commands the consent of the German people.
We are asked to believe that the European central bank will command similar respect and admiration. If one asked the German people about the matter, which of course the German Chancellor has no intention of doing, they lament the fact that their deutschmark is to be taken over by the euro.
While the German people may accept that decision as inevitable at this stage of the proceedings, and while many other countries may even vote for it in referendums—it must be acknowledged that the issue may be decided in that way by this country—the problem is not the consent to that proposition, but the on-going consent on an annual basis to the way in which economic policy is determined.

Mr. Gill: Has it occurred to my hon. Friend that the advocates of a single currency were advocating it some

time ago on the basis that it would be a hard currency, yet the same people are now advocating it on the basis that it will be a soft currency?

Mr. Jenkin: I shall deal with that point shortly. Crucial to the effects of the centralisation of economic policy and of interest rate setting is the fact that the same policy will be applied across all member states in the single currency area. That will lead to wide disparities in economic performance in different parts of the European Community.
It is not difficult to see why the Confederation of British Industry has been so strongly converted to the idea of a European currency, if it is looking no further ahead than the next five or 10 years. The CBI sees that Britain is now suffering the effects of growth that has been too strong, and therefore we have rising interest rates and a strong pound, amid weak European currencies. As the markets readjust their expectations for a weak euro, the CBI sees the prospect of monetary union bringing a reduction in the value of the United Kingdom currency prior to joining, followed by a massive reduction in nominal interest rates. That would be a bonanza for the British economy.
However, the CBI fails to understand that such a bonanza would be the beginning of a restructuring and reshaping of the British economy, the second half of which would be a massive recession and a massive fall-out as our economy adjusted to the economic circumstances of the rest of Europe.
It would be easy to get consent for the first part. No doubt the Chancellor of the Exchequer will hold out all the lollipops and carrots of the first part of our joining an economic and monetary union under such circumstances, but what will happen during the second part of the adjustment, when things get rough, unemployment starts to rise and the people who elect us to be responsible for economic policy in this country find that the politicians can do nothing but hold up their hands and say, "It is nothing to do with us—it is all now being decided by the European central bank"?
My expectation is that people who hold up their hands so lamely are unlikely to be re-elected. The people who would be elected under such circumstances would be those who said that we should never have joined that contraption in the first place. Unfortunately, we would be in a single currency, and it would be extremely difficult for us to conceive of circumstances in which we could leave it.
Members of the Committee know from experience how difficult it is to manage economies on a national basis, when we are all engaged in the process of the annual Budget statement, for example—the most important job that the House does—assessing what interest rates should be, what growth rates should be, what rates of employment are likely to follow, how much the Government should borrow, and how much they should tax.
That is a hard enough job. Imagine transferring those decisions and judgments to international institutions for all the member states, where we no longer share an affinity through language, culture and historic institutions, but are working through untried, untested, rather distant and unaccountable institutions. The average Brit or German would have only a vague idea of what those


institutions do, but even the people in them would find that they had to work in 15 languages and make up operating procedures as the single currency was bedded down. Imagine how hard it would be to run all those institutions with some measure of democratic consent.
Members of the Committee should try to imagine a housewife in Surrey switching on her radio one morning and listening to "Yesterday in the European Parliament", in which a spokesman from her party presents the budget statement to the European Parliament in Greek or German—in simultaneous translation, of course—and the Spanish Opposition leader, say, delivers a response. Would she feel as connected to the process of economic management as the British, German or French people feel to the economic decisions currently taken in their country? If one can believe that, one can believe in the possibility of a federal Europe.
Unless those circumstances are likely to arise, the embarkation on the centralisation of economic decision making in the European Union is likely to result not only in the economic dislocation so ably described by the hon. Member for Merthyr Tydfil and Rhymney and the, right hon. Member for Llanelli, but in political disintegration, the collapse of democratic consent, and in Europe the rise of frustrated extremist groups such as Jörg Haider in Austria, the Vlaams Blok in Belgium and Jean-Marie le Pen's National Front in France. They will be the beneficiaries of such misplaced idealism.
The House and the Government must make sure that that eventuality never occurs. That is why I appeal to the Minister to make it absolutely clear today whether he is in favour of a federal Europe, and, if not, what action he will take to deal with it.

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Mr. Mike Gapes: Last night I enjoyed a rare pleasure as a Member of Parliament: I read a bedtime story to my four-year-old daughter. My daughter is very interested in stories about monsters, and one of her favourite books is called "Where the Wild Things Are". That story refers to people sailing away for a year and a day and rushing back only to realise that they have been asleep.
I have listened to Conservative Members' contributions. It has been slightly more than a year and a day, and the hon. Member for Stone (Mr. Cash) has changed his constituency, but everything else in his speech was identical to last time. Sometimes one has feelings of deja vu because one is witnessing a total rerun of events during the 26 days in Committee on the Maastricht treaty.
We must recognise that Europe has moved on since then. I admit that the Amsterdam treaty is modest, and may not be what many people want. I agree with my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), who criticised the limited nature of the employment chapter. I believe that it is a first step, and must be built on in future. Nevertheless, there have been some changes since 1991 and 1992 and our debates in this place during the last Parliament.
One difference is that the people who contested elections with the support of Mr. Sykes's millions are now much reduced in number. That is partly because they have

advanced exactly the same line, the same arguments and the same simplistic views about the threats to this country. They still talk of fears of Britain being taken over—

Mr. Bercow: rose—

Mr. Gapes: I shall give way in a moment. They use words such as "appeasement" and "capitulation". They speak all sorts of nonsense about this very modest treaty.
Some people are expressing fears about developments in Europe—an American academic was quoted several times on the subject. It is interesting to note that some in the United States are becoming increasingly worried about what might happen if the European Union gets its act together and becomes more effective on the international stage. In terms of World Trade Organisation negotiations and a collective European voice on international matters, the European countries would be more effective if they worked together: they could not be played off against each other, and there could be no divide and rule.

Mr. Jenkin: rose—

Mr. Gapes: I shall give way, but first I must develop this point.
In the past few months, we have witnessed an emergency in international markets generated by a crisis in Thailand that spread to Indonesia, Malaysia and to South Korea. There is no single currency involved in that region; there is no unified super state. What lesson can I learn from those events? If I were to take the worst case scenario—

Mr. Howard Flight: rose—

Mr. Gapes: I shall give way in a moment.
I could claim that it proves that nation states and separate currencies lead inevitably to instability and crisis. However, it does not prove anything of the sort—nor does the model developed by the hon. Member for Colchester—

Mr. Jenkin: North Essex.

Mr. Gapes: The hon. Gentleman has changed his constituency also, but his views remain identical to those he expressed in the last Parliament.

Mr. Flight: The lesson that the world has surely learnt from the crisis in Asia is that it is a great mistake to try to maintain a fixed exchange rate. The International Monetary Fund and leading economists have pointed out that, if those economies had permitted their exchange rates to move up and down with their cycles, most of the crisis would have been averted. If the whole of Europe, encompassing many different economies, has not only a fixed but a single currency, there will be greater mayhem than we have seen in Asia.

Mr. Gapes: That is an interesting argument— presumably it is entirely consistent to apply it to events during the years when the Bretton Woods system worked well. There was economic recovery following world war


two, and a period of relatively fixed exchange rates. Nevertheless, there was also increasing prosperity and economic growth.
The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) revealed an obsession with the European Court of Justice. He argued against the 48-hour week. Is it not a fact that many other European Union states have operated legislation of that kind without any difficulties? Do not the 48-hour provisions allow for exemptions for certain industries? Such rules take account of the diversity of industries such as travel and transport.
Yet the obsessions and the phobias within the Conservative party prevent Opposition Members from seeing reality: they must build a straw man and create a big issue. A Conservative Government would have made the 48-hour week a show stopper—a sticking point—in Amsterdam.

Mr. Letwin: The hon. Gentleman is developing a most interesting line of argument. Presumably he will want to castigate the Prime Minister, who stated categorically that he opposed the further development of the powers of the European Court.

Mr. Gapes: No, I do not wish to castigate the Prime Minister. I am sorry to disappoint the hon. Gentleman, but I wish to praise the Prime Minister and the Government.
We went to Amsterdam committed to reaching an agreement and securing a treaty, without which the enlargement of the European Union would be impossible. If the Conservatives thought logically and rationally about the issue—rather than reading out the latest brief provided by some well-funded Euro-sceptic think tank—they would recognise that enlargement of the European Union, which they claim to want, and negotiations to secure enlargement will not happen until six months after the conclusion of the Amsterdam treaty.
If there had been no agreement at Amsterdam—that was the hope of the right hon. and learned Member for Folkestone and Hythe, who wished to stand alone and be isolated in Europe; he wished to block agreements, because everyone was wrong except him—there would be no enlargement negotiations.

Dr. Palmer: Is my hon. Friend aware that the situation is rather more sinister than he supposes? We have heard in European Standing Committee B that Conservative Members oppose the Opposition's official line, and oppose enlargement. That is yet another split within the Conservative party.

Mr. Gapes: That is revealing information. It reflects the concern expressed recently by the former Prime Minister, the right hon. Member for Huntingdon (Mr. Major), who voiced fears about the Conservative party's continuing movement to the hard right since the election. The reality is that the European Union will succeed on the basis of practical co-operation, as it has done throughout its existence. The United Kingdom has a very important contribution to make to developing practical co-operation within the European Union.

Mr. Bercow: Will the hon. Gentleman tell the House whether it is an example of practical co-operation or of a commitment to democracy to prohibit member states of

the European Union from making representations about the conduct of monetary policy by the European central bank? Is that of accord with the type of practical co-operation to which he enthusiastically refers?

Mr. Gapes: It is not in the interests of any European Union state to be out of the discussion process about the future of economic and monetary union and development of the institutions that will lead to it. That is why our Government have said that, when the economic circumstances are right, in principle we should join that economic and monetary union. In contrast, the Conservative party would have taken a view that—for the foreseeable future, for 10 years, or never—we should not enter the process, and therefore have no influence in the shaping of it.
If the hon. Member for Buckingham (Mr. Bercow) is concerned about such matters, he will presumably condemn the former Chancellor of the Exchequer, the right hon. and learned Member for Rushcliffe (Mr. Clarke) for his important role in developing economic and monetary union in discussions that were held at the end of 1996.

Several hon. Members: rose—

Mr. Gapes: I will give way to Conservative Members if they insist on intervening, but I should like to build my argument a bit—[Interruption.] If the hon. Member for South Holland and The Deepings (Mr. Hayes) want to intervene, I shall be happy to give way, but I should be grateful if he will let me develop the point a bit further.
Questions have been raised on European security, the NATO alliance and the former article J, which is now article 17. The shadow Foreign Secretary argued that the Amsterdam treaty weakens the commitment to NATO. An interesting paper from the Library points out on page 33 that the position is quite the opposite, and that, compared with the Maastricht treaty, some member states' commitment to NATO has been strengthened in the Amsterdam treaty. It states:
the recognition of the latter has been strengthened. Whereas article J.4(4) stated that 'The policy of the Union in this Article… shall respect the obligations of certain Member States under the North Atlantic Treaty and be compatible with the common security and defence policy established within this framework', the new article 17 inserts the wording 'which see their common defence realised in NATO".
Therefore, it is not true that our Government have signed up to weakening NATO. They have either maintained the current position, as in the Maastricht treaty, or perhaps even strengthened commitment to NATO, as stated in the paper from the Library.
My hon. Friend the Member for Merthyr Tydfil and Rhymney drew attention to the fact that there are problems of peripheral regions in the European Union. No one can doubt that. With enlargement, the disparities between peripheral regions and the European Union core will grow. Such disparities will also be a part of the logic of enlarging the European Union into eastern and central Europe, and will lead to significant changes in funding arrangements and in the special arrangements for countries that are being assisted with regional funds.
8.15 pm
The disparities show the need for a fundamental examination of European Union financing, and they provide the basis for an argument that greater resources should applied to dealing with the types of problem mentioned by my hon. Friend the Member for Merthyr Tydfd and Rhymney, and that fewer resources should be expended on the wasteful common agricultural policy. I hope that the Government will vigorously implement their manifesto commitment—I am sure they will—to press within the European Union for rebalancing resources, so that we can spend far less on subsidising farmers and far more on helping regions on the periphery of the European Union and on areas with very high unemployment.

Mr. John Hayes: Does the hon. Gentleman therefore think that it is feasible to enlarge the Union but not to allow all members equal status in the CAP? Is he saying that the CAP is inappropriate for new members? If he is not saying that it is inappropriate, and that new members should be included in the CAP, the problems that he has described will be exacerbated.

Mr. Gapes: I am saying that, as it is today, the CAP is inappropriate for existing members, and that, with enlargement, it would be inappropriate to try to keep the CAP as it is. One of the best arguments for enlargement is that EU membership for Poland and Hungary will make it impossible to continue the current common agricultural policy.

Mr. Hayes: The hon. Gentleman mentioned Hungary, which has 1.1 million small farmers. One reason why Hungary wants to enter the European Union is that it appreciates the benefits of a common agricultural policy, be it in its current form or in a form envisaged under Agenda 2000. The problems that he described will be exacerbated by admission of some eastern and central European countries that have far less efficient farming than exists in the main stream—what he called the "core"—of Europe. He offers no solutions. Is he suggesting a two-tier Europe? What is he suggesting?

Mr. Gapes: I always thought that the Conservative party was in favour of enlargement, but perhaps my hon. Friend the Member for Broxtowe (Dr. Palmer) was right. We are hearing speeches from the new isolationist wing of the Conservative party, which does not seem to be in favour of European Union enlargement. Anyone who has been to Poland, Hungary and the Czech Republic—as I have—and talked to people there will know very well that people in those countries realise that, although they may not like it, their current agricultural system cannot possibly cope with European Union membership.
In Poland, for several years, there has been a significant economic shift, with fewer people working the land. Change is already happening. Many far-sighted people in those countries are using the prospect of European Union membership as an argument, before membership, to accelerate that economic shift, and they will use it after joining to reduce their dependence on an inefficient production system.
I hope that the Bill will receive full-hearted support from hon. Members on both sides of the House who believe in British membership of the European Union, and who realise that the Amsterdam treaty is a modest but important contribution to assisting the people of the United Kingdom, those in the rest of the European Union and those who wish to join the European Union in the future.

Mr. Gill: I am tempted to follow the excellent speech of the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), who told the House what the consequences of fixed exchange rates would be on unemployment. It is important that there is a full, frank and honest debate about the consequences for United Kingdom employment prospects if we complete fixed exchange rates with the other countries of the European Union. History demonstrates—it is a matter not of economic theory but of fact—that, if the United Kingdom joins fixed exchange rates, unemployment automatically goes up.
The hon. Gentleman was honest enough to explain to the Committee that the only way to mitigate the effects of fixed exchange rates was by a massive transfer of funds from the centre to the regions. For the benefit of the hon. Member for Ilford, South, let me say that we must not assume that Great Britain will in future necessarily be regarded as a poor region that will attract the funds which would be necessary, if there were fixed exchange rates, to create prosperity or avoid unemployment in our regions.
On that same point, it is inconceivable that the constituents of those hon. Members who have spoken in favour of the treaty are going to resolve the matter of their own unemployment by moving to other parts of the Community. It is all very well to talk like that with reference to the United States of America where the same language is spoken in New York, Florida and California, but the same does not apply in Europe. Someone who loses his job in south Wales is not going to be in the same happy position as his American counterpart, and will not be able to find himself a job in Prussia, Italy or Portugal.

Mr. Gapes: rose—

Mr. Gill: I gladly give way to the hon. Gentleman; I look forward to him coming up with some hard arguments and facts to support his ridiculous contentions. To judge from what he was saying, I though that he was reading from his four-year-old's fairy tale book.

Mr. Gapes: My daughter reads books for much older children than that. Is the hon. Gentleman saying that, because this Government's policies will mean that we shall cease to have regions whose deprivation and unemployment is such that they attract special assistance from the European Union, we should therefore oppose enlargement of the European Union by smaller countries of central and eastern Europe? Is he now joining the hon. Member for South Holland and The Deepings (Mr. Hayes) in opposing enlargement?

Mr. Gill: The hon. Gentleman knows full well that that is not what I was saying. I shall now return to the point that I was making, which involved the effect of fixed exchange rates on unemployment. I conclude my comments on that issue by saying that it amazes me that


so many Labour Members do not understand, refuse to understand or have perhaps been intimidated and are not allowed to understand that that is the key issue. It is the issue to which their constituents will return time and again—fixed exchange rates lead inevitably to unemployment.
It will not be the fat cats or the Eurocrats who find themselves without a job but Labour Members' constituents, and my constituents. I could not vote for fixed exchange rates because I know what the consequences would be for my constituents. The same was true of our membership of the exchange rate mechanism—thousands of my constituents lost their jobs, many of them lost their homes, and many lost their businesses.

Mr. Jenkin: rose—

Mr. Gill: I have to give way to my hon. Friend.

Mr. Jenkin: I am grateful to my hon. Friend for returning the favour. Does despair, like me, when confronted with arguments to the effect that we can somehow return to a Bretton Woods system which depended on one major currency instead of several as we have now, and which existed when there were capital controls on all the major economies, so that there were no international capital flows such as we have now? Does he not despair when people simply ignore the fact that even a big currency like the yen can crash and be subject to speculation? Labour Members seem incapable of learning that even the euro, stretching across an entire continent, could be speculated against, be unstable and lead to economic dislocation within that area.

Mr. Gill: I follow my hon. Friend's line of argument. As he knows, Bretton Woods was blown away by the oil crisis, just as every other system of fixed exchange rates has been blown away by one factor or another.
What I am trying to tell the Committee, particularly those Labour Members who do not want to hear it, is that the inevitable consequence of pursuing fixed exchange rates will be unemployment for their constituents. Sadly, there will be unemployment for my constituents, too. I do not believe in this policy, which is why I am resisting it. I do so not because of any brief that I have picked up from central office or from anyone else's office or from any lobby group—this is what Christopher Gill feels so strongly in his heart, and what is demonstrated by the economic history of this century.

Mr. Casale: I share the hon. Gentleman's concern for employment and for a European Union that offers clear benefits to the British people. However, many of the amendments, which I assume he is supporting, would prevent Britain from ratifying the Amsterdam treaty. Is he not aware that failure to ratify the treaty, which would then disconnect Britain from Europe, would create a level of unemployment of which even he, in his current line of argument, has not dreamed?

Mr. Gill: The hon. Gentleman draws attention to what he believes to be the obvious benefits of being in Europe. If he catches your eye, Mr. Lord, perhaps he will tell the Committee what those tangible benefits are; let him quantify them. In the meantime, I return to the argument that I was developing.
The hon. Member for Merthyr Tydfil and Rhymney also said that so many features of the European Union are the absolute opposite of what they profess to be. Paragraph 4 of article 1 of the treaty states:
This Treaty marks a new stage in the process of creating an ever closer union"—
I shall leave out at this stage any consideration of whether that is what the people of this country want—
among the peoples of Europe, in which decisions are taken as openly as possible and as closely as possible as the citizen.
The implication is that the European Union is to be a democratic organisation or a democratic state—that is the implication of saying that discussions and decisions are to be open and that everything will be brought as close to the people as possible. However, the opposite is the case. As the hon. Member for Merthyr Tydfil and Rhymney said, so much turns out to be the opposite of what we were told.
We are not talking about democracy today. The hon. Member for Merthyr Tydfil and Rhymney described the European Union as corporatist, but I have another word for it—collectivist. How else can one describe, for example, the common fisheries policy, whereby it is not this Parliament but the European Commission that tells our fisherman what he should catch—by species and size—where he should catch it and in what quantity? That is not democracy but collectivism.
It amazes me that even some Conservative Members who have opposed Communism all their lives have apparently found it in themselves to support these policies which are nothing if not collectivist. To this day— [Interruption.] The hon. Member for Ilford, South laughs, but is he laughing for the people of North Korea who are starving because that country continues to promote and adhere to collectivist polices?
Paragraph 2 of article 1 of the treaty declares that member states shall be determined
to promote economic and social progress for their peoples, taking into account the principle of sustained development".
To continue my analogy with the fishing industry, it is interesting to consider sustainable development. There we have a natural resource, which will go on regenerating itself if we handle it properly. Under the collectivist common fisheries policy, hundreds and thousands of tonnes of perfectly saleable fresh fish are being thrown back dead into the sea. When some of the fish reaches the shore, they are condemned.
In fishing harbours in the British isles, I have seen beautiful, plump fresh flat white fish covered in red paint because they did not come up to the minimum landing size prescribed, not by anyone in this Parliament but by the European Commission. I see my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) nodding in agreement, because he has been to those harbours with me and can verify what I have said.
That is all done in the name of conservation, which is the opposite of what is happening. In the name of conservation and in advance of the Fisheries Council last month, the Council was proposing to reduce the size of plaice that can be caught to the size of the piece of paper that I have here. A plaice of that size cannot possibly breed and needs a minimum of one more year, or more likely two, before it is fit to breed.

The Second Deputy Chairman of Ways and Means (Mr. Michael Lord): Order. Visual aids are not normally allowed in the Chamber. I should be grateful if the hon. Gentleman would desist.

Mr. Gill: I am glad that hon. Members were able to see that before you intervened, Mr. Lord, but I bow to your judgment on that matter.
I was trying to point out that we are talking about an organisation that says that it believes in conservation, among many other things, but that what it is doing is the antithesis of conservation. I am glad to say that the Council has now agreed that the size of plaice that can be caught will be increased from the size that I was demonstrating, but there will still be a reduction of 20 per cent. on the size that is allowed now. In other words, we are going to catch smaller fish in the name of conservation. Everything is the opposite of what it seems, rather like another fairy tale.
Only through the continual and consistent misrepresentation of what the European Union stands for and what the treaties mean has this country progressed so far down this road, in the opposite direction to democracy, and the people of this country have not been consulted.
Will the Minister please be honest when he sums up tonight? Will he address the serious and important questions posed on both sides of the House and answer them? Unless he does, we shall not be having a debate at all. We want answers to those questions, and the British people deserve no less.

Mr. Bill Rammell: It is fascinating to observe the fundamental change in the Conservative party since the general election. Tonight, the former rebels who had the Whip withdrawn in the previous Parliament for opposing the then Government's policy on Europe are strongly represented. All those hon. Members here this evening have argued passionately and with conviction against Europe, and by implication, I believe, against membership of the European Union, and they have clearly been supported from the Opposition Front Bench. Clearly, that shows the way things have changed since 1 May within the Conservative party.
Also, we have heard a deep degree of fantasy, not reality, about what the Amsterdam treaty is about and what was agreed there. After all, that is what we are meant to be talking about. It is difficult to reconcile some of the assertions by Conservative Members and by the Opposition Front-Bench spokesman about the Amsterdam treaty with the views of other prominent Conservative Members and Conservative party supporters.

Mr. Jenkin: Can the hon. Gentleman clarify to which amendment he is referring?

Mr. Rammell: I am referring to a number of the amendments tabled on foreign and common security policy, the social chapter and the single currency, among others, as other hon. Members have done.
Interestingly, the right hon. and learned Member for Rushcliffe (Mr. Clarke) said of the Amsterdam treaty:
There is no point in getting over excited about Amsterdam. The integrationists in Europe saw it as a victory for Britain and the British Government.

Lord Howe, the former Foreign Secretary, said:
Amsterdam disappointed the advocates of integration. Actually the treaty is a pragmatic and not a path-breaking document.
How do we reconcile those views of what was achieved with the treaty with some of the xenophobic rhetoric about what was achieved that we have heard this evening? It is impossible—

Mr. Bercow: I am grateful to the hon. Gentleman for his courtesy in giving way. I invite him now, without a moment's delay, to cite exactly which example of a xenophobic statement he has in mind. Which hon. Member uttered the statement, at what point in the debate, and will he quote it?

Mr. Rammell: The general tone of the comments put forward this evening stems from a little Englander attitude that is based on the concept that we in Britain know best, that we can achieve everything on our own but cannot do so in concert with other nations. That is the failure of some of the views expressed this evening.

Mr. Owen Paterson: Will the hon. Gentleman give way?

Mr. Rammell: No, I will do so later.
Given the tone of this debate, it is also disappointing that it so little represents the majority view in the House and the country. People will look on this debate and wonder what sort of discussion we are having of these crucial issues when the arguments are so unrepresentative.

Mr. Letwin: I certainly would not want to say anything remotely controversial. I am sure that the hon. Gentleman would agree that the most remarkable feature of this debate is the entire absence of the Liberal Democrat party from our proceedings—a party which apparently has no interest in Europe and which he will agree has also not represented itself in European Standing Committee B.

Mr. Rammell: That comment has been made before, both this evening and in the Standing Committee. The hon. Gentleman makes it effectively, although we have an hour and a half to go and perhaps—who knows?—we shall have a view from the Liberal Democrats.
Concerns have been expressed about the item in the treaty referring to penalties for persistent abuse of human rights and the fact that those penalties will be used in some way to disadvantage Britain and the British Government. The shadow Foreign Secretary even implied that that element of the treaty would be used to block Britain's view on a minimum wage or other social legislation. That sort of scaremongering does no credit to the people who put it forward. There is no evidence in the treaty or any of the discussions at Amsterdam or elsewhere that anyone intends to use that element of the treaty in that way.
Concerns have also been expressed about the European Court of Justice, in particular about instances when it has gone beyond its remit, over-interpreting certain elements of the treaty legislation. One of the difficulties that the judges at the European Court of Justice face when interpreting the treaty is having access to the debates and discussions that take place when treaties are formulated. One mechanism that could help with the process would


be to open up the meetings of the Council of Ministers so that people can be aware of the basis on which the original decisions were made when interpreting them. I would welcome Opposition Members' comments as to whether that view is shared across the House.

Mr. Letwin: That is a very serious point. I am sure that the hon. Gentleman will take comfort from the fact that all Conservative Members share that view. Why does he believe that the Prime Minister made no allusion to even a desire to achieve such a result in Amsterdam?

Mr. Rammell: In the six short months that we have been in office, we have taken several significant steps to open up the decision making of the European Union. That will progress in coming years. We are prepared to consider such changes. Time will tell.
I share some of the concerns expressed by hon. Members about the status of the employment elements of the treaty. We must ensure that there is substance to the initiatives and that there will be detail and real momentum behind the employment provisions. If Europe is only a monetary or business Europe, and is not based on jobs and prosperity for its people, it will not succeed.
We have also had a significant debate on the single currency. I welcome the fact that Conservative Members, unlike the Leader of the Opposition, have formulated policies on the single currency with some honesty and conviction. The concept of a single currency is alien to their political views. I believe that that is a false view.

Mr. Jenkin: Will the hon. Gentleman give way?

Mr. Rammell: No, I shall give way later.
One reason why I support a single currency in principle is that I do not believe that individual nation states have complete sovereignty and control over economic decision making. We have only to reflect on what happened in September 1992, when massive speculation and a run on the pound forced us to put up interest rates by 4 per cent. in one day in a futile effort to protect the value of the pound. A single currency, by virtue of being part of a larger currency bloc, could help to stem the power of the speculators. By pooling some of our sovereignty, we would have greater economic control.

Mr. Bercow: rose—

Mr. Jenkin: rose—

Mr. Rammell: I give way to the hon. Member for Buckingham (Mr. Bercow).

Mr. Bercow: Does the hon. Gentleman think it right that, under the single currency that he favours, member states should be open to being fined for seeking to influence the conduct of monetary policy by the European central bank? Does that not do violence to the principle of democratic self-government?

Mr. Rammell: The events of September 1992 were one of the major reasons for the scale of the Conservative defeat on 1 May, and one of their major causes was our lack of control over our economic affairs in a global international currency situation. I believe that, in some

instances, we should pool some sovereignty to get more effective control over currency speculation and our own economic affairs.

Several hon. Members: rose—

Mr. Rammell: I will give way later. I want to make some progress.
Many hon. Members have discussed the common foreign and security policy. We need Europe to speak with one voice and to be able to influence the international situation. In many ways, the common foreign and security policy has already worked. The stability pact with central and eastern Europe linked accession with the record on democracy and human rights of applicant countries. That made progress, and changes took place. Working together with other European nations to put such pressure through the common foreign and security policy would achieve more than we could achieve as an individual nation.
The reconstruction and administration of Mostar under the common foreign and security policy saw countries coming together to achieve more than we could have achieved alone.

Several hon. Members: rose—

Mr. Rammell: I shall give way in a moment.
On future development, through the mechanism of the European code of conduct for arms sales, we can achieve more than we could on our own.

Mr. Bercow: What objection does the hon. Gentleman have in principle to the extension of qualified majority voting in respect of the common foreign and security policy? To be absolutely clear, is there any such extension of QMV to which he objects in principle and that we can take as a touchstone of his political position on the subject?

Mr. Rammell: There are several issues on which it would not be appropriate to develop policy through QMV. That goes to the heart of the debate. The treaty and the common foreign and security policy are about enabling the EU to speak more effectively with one voice. They build in safeguards.
We have the common strategy, and we shall move forward by consensus where we can, but at the beginning the establishment of the common strategy must be achieved by unanimity. If we agree a common strategy and there is a proposal about which we are unhappy, we can argue the case as an important, stated reason of national policy that we want referred back to the European Council. Ultimately, the British people have the security of the veto on such important matters.

Mr. Jenkin: The hon. Gentleman suddenly sounds more sceptical about the nature and scope of European integration. By the same token, may I make it clear that Conservative Members, including my right hon. Friend the Leader of the Opposition, would, if we thought it in the national interest, agree to Britain joining economic and monetary union, but cannot foresee such circumstances arising for some considerable time.

Mr. Rammell: I am not convinced that that is the policy of the Conservative party. It is interesting to reflect


that official Conservative policy on EMU—not some of the views advanced this evening—is logically inconsistent. If the objection to monetary union is constitutional and political, it should be ruled out for ever and a day.
To give Conservative Members their due, many have done that this evening. If it is not constitutional or political, it is an economic judgment, so how can it then be ruled out for 10 years? Many Conservative Members have thought the matter through and reached views with which I disagree but which are logically coherent, but that is not the position of their Front-Bench spokesmen.

Mr. Gill: The hon. Gentleman speaks as though entering into fixed exchange rates and giving away our currency would be a surrender of only a certain amount of sovereignty. What sovereignty would be left once we have created a single currency? I want him not to be airy-fairy but to think about the question and say in respect of what specific areas he thinks the House would retain any sovereignty, given that almost every decision affecting monetary and ultimately fiscal policy will be decided outside this Parliament.

Mr. Rammell: I do not accept the final part of the hon. Gentleman's argument. One of the fallacies put forward in this debate has been that, by signing up to a single currency, we automatically lose control of tax rates. The convergence criteria are about public sector deficits. No one would argue—from the left or the right—that a huge long-term public sector deficit is sensible economic policy. We would still have the ability to manage taxation policy.
In considering sovereignty, I am anxious about tackling international currency speculation, which the House cannot control. Some 90 per cent. of foreign exchange market transactions are not business transactions but pure speculation. When the circumstances are right and we join the single currency—we still need to make a fine judgment on that—we will pool some of our sovereignty and end up with more control over speculation and more ability to achieve stability, lower inflation, lower interest rates and, in the longer term, higher employment.

Several hon. Members: rose—

Mr. Rammell: I shall not give way, because other hon. Members wish to speak.
The shift within the Conservative party and the views that have been expressed have been useful, in that they have flushed the issue out into the open. A view has long been held that there is a deep well of nationalism and chauvinism in Britain. I do not believe that that is the case. I believe that those views are skin deep within the British people. By adopting and articulating such an extreme position, the Conservative party has forced people to confront the economic reality of Europe and the single currency.
It is already clear that a shift is taking place. I come into contact with it in discussions with people in my constituency. One can see it in the opinion polls. More people are prepared to consider the issues, and fewer are

prepared permanently to rule out a single currency, as many Conservative Members wish to do. So the Conservative party has done us a service.

Mr. Denis MacShane: On this occasion.

Mr. Rammell: Yes, on this occasion. We should take the shift forward. I hope that in the Committee proceedings we can have debates that are more representative of the views of hon. Members than the debate today.

Mr. Crispin Blunt: I should like to address my remarks to amendments Nos. 65 and 17, both of which I support. In doing so, I find in front of me on the ground a standard bloodied and battered which I, as the new Member of Parliament for Reigate, have inherited from my predecessor. I intend and am proud to raise that standard, although I shall rotate 180 degrees and carry it towards the enemy.
On foreign and security policy, the most important issue should be substance, not form. The treaty represents an uneasy compromise in this area, not only between form and substance but between the competing visions of the future of Europe. Nowhere is that more glaring or potentially more dangerous than the position on defence. That is illustrated by the language on defence in the treaty.
We have the welcome protocol on NATO, but in the new article 17 the integrationist French position of
progressive framing of a common defence policy
is conceded. The prospect of common defence combined with the protocol language on NATO arguably ends up with the worst of all worlds.
Let us consider the example of the Baltic states. Any security guarantee has the potential to spark a crisis with Russia. Russia will have no legitimate objection to the Baltic states entering an economic European pact, but the European Union is an institution accreting to itself the progressive trappings of statehood. For the Baltics there is an implicit security benefit to EU membership, but a specific defence arrangement could provoke a wholly avoidable European crisis and hand to the extremists in Russia the ammunition again to wind up the danger of Russian nationalism.
Never mind the Russians, what about the Americans? The United Kingdom is anxious to see the EU enlarged, as, formally, are our partners. We want the EU to enlarge well beyond the boundaries to which the United States Senate would be prepared to extend article 5 security guarantees. The juxtaposition of the protocol on NATO and the progressive framing of a common defence policy could lead to a crisis with the United States. We are entitled to be suspicious of the motives of those who would welcome such a crisis, for they exist. The cause of European integration will be significantly advanced if Europe has to develop, in the absence of the United States, a stand-alone defence identity that has to work in its own interests.
Although the Government should be congratulated on securing the language on NATO, they will need to be on their guard against the can of worms that the
progressive framing of a common defence policy
represents. Eternal vigilance will be required, a task beyond a Government who see no constitutional problems with a single currency.
The relationship between the Western European Union—the proper vehicle for European defence arrangements—and the European Union have been made unhappily dynamic by the treaty. The protocol to article 17 calls for arrangements for enhanced co-operation to be drawn up within a year. That process must not allow those two organisations to become legally or constitutionally muddled. The WEU council must remain distinct from the European Council. When the treaty grandly talks of the EU "availing itself of the WEU, its language is thoroughly unwelcome. It implies legal superiority of the EU over the WEU.
I remind the Committee that the duties imposed by the Brussels treaty are far more onerous than anything under the European Union or even NATO. That achievement should be preserved, not undermined, which is what the language of the treaty does.
Many tens of thousands of brilliant man hours, not least those of my former colleagues in the Foreign Office, have been spent on trying to frame the operation of a new common foreign and security policy. Their efforts have avoided Monsieur PESC, but all that intellectual effort has been wasted on agonising over structure and has not been directed towards what the CFSP should achieve. Their efforts have resulted in the hideous complications of common strategies, common positions, joint actions, constructive abstentions, a high representative, special representatives and so on, in language incomprehensible to ordinary people.
The focus should have been on output. I can express this no better than in the words of the previous Foreign Secretary, the former Member of Parliament for Edinburgh, Pentlands, in a speech in Paris. It is perhaps not difficult to discern the audience that he had in mind. He said:
A sham display of unity convinces nobody, particularly not those who can sense the exercise of real power… Where CFSP represents common interests and common will, where it acts with the grain of our national traditions and perceptions, then it will succeed. But where CFSP tries to over-reach itself, there we should let reality prevail …It is a Common Foreign and Security Policy that we seek to establish, not a Majority policy.… But it would be wrong to believe that constructive abstention will somehow resolve real disagreements. It would make no sense to expect a country which actually disagrees with a policy to support it—whether politically or financially—through something called 'constructive abstention'… The real issue here is that it is the effectiveness of CFSP that matters, not the internal decision-making procedures.
Constructive abstention, as foreseen by Malcolm Rifkind, is nothing more than the recorded public division that will undermine Europe's collective foreign policy influence. The way in which we deal with real crises will remain in the future, through coalitions of the willing, as in the Gulf, and through contact groups, as in the former Yugoslavia. Where European co-operation and the mutuality of our interests are real, the CFSP will enable the voice of the states of Europe to be heard with greater force and clarity. Constructive abstention and qualified majority voting on CFSP issues will undermine the objectives that the individual nations of Europe might otherwise pursue on their own account.
Finally, I shall discuss the wholly unfortunate arrangements for financing the CFSP. The treaty states that administrative and operational expenditure for the implementation of the CFSP, except defence expenditure, will be charged to the European budget. That startlingly foolish provision brings the CFSP within the scrutiny of

the European Parliament, which, to its shame, already has a record of holding the budget to ransom in an attempt to force an increase in its influence in wholly unrelated areas. By that procedure, the Parliament will have an influence over the CFSP that we can be sure it will use. The Parliament might even use that influence for purposes unrelated to the CFSP, to advance its other objectives.
That provision gives the game away. A policy that is supposed to be intergovernmental is to be funded not by the member states, but by the European budget. If we want to know where we are being marched by the treaty, we need only follow the money. The Government perceive no constitutional issues in respect of economic and monetary union, and they are in favour of the greatest measure of European integration available. Why then, I am inclined to ask, are we going through the charade of pretending that the CFSP will remain intergovernmental? Why do the Government not get on with honestly promoting European integration in the CFSP, just as they will in EMU? The financing of the CFSP is yet more evidence of the direction in which we are heading, and passing amendments Nos. 65 and 17 would help to stop the rot.

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Mrs. Louise Ellman: My concern is that the amendments, together with the comments made this evening, would undermine the social and economic well-being of significant numbers of citizens of this country, in opposition to paragraph 2 of article 1 of the treaty. If the amendments were passed, the treaty could not be ratified, and the position of this country in Europe would be undermined at a critical time for this country as a whole and for vulnerable regions of this country.
One of the main ways in which the European Union has been of great benefit to significant numbers of our citizens has been through the operation of its structural and community policies. Enlargement of the community is being considered, and at the same time renegotiation is taking place on the eligibility of major areas of our country for access to vital European funds—conventional structural funds from the European regional development fund, and the European social fund and community funding.

Mr. Swayne: Is the hon. Lady aware that those funds come from the British taxpayer—that we are net contributors—and that we are quite capable of making those allocations? Will she address the issue of how those disadvantaged regions will fare when they are subjected to an unfavourable interest rate regime, which it might well be beyond the limits of any structural fund to put right?

Mrs. Ellman: I reject the hon. Gentleman's central contention, and I shall specifically answer his points about eligible regions.
My experience of eligible regions in this country is that the sensitive application of European funding has produced greater business investment, enabled essential skills training to take place and helped to redevelop major areas of our country. Specifically, I have seen representations to the European Commission and the European Parliament result in the setting up of the vital


Konver fund, which has directly benefited areas of this country where the local economy was undermined by the running down of defence industries under the previous Government.
I have seen European funds working with the private sector in the objective 1 area of Merseyside, where the innovative special investment fund has used European funding with private sector money to support small and medium enterprises in a way not previously done. I have seen, in the north-west region as a whole, the setting up of a network of technology centres that work with the private sector, universities and the voluntary sector to ensure that new technological knowledge is applied in a variety of business concerns and voluntary organisations.

Mr. Bercow: I note what hon. Lady says, but, if I may say so, she has rather missed the point made by my hon. Friend the Member for New Forest, West (Mr. Swayne). Is she arguing, simply because she supports the operation of structural funds, that that justifies pursuing a deflationary monetary policy in Europe to increase those funds? Will she tell the Committee how, in any sense, the greater taxation that bigger cohesion funds would entail is consistent with the article 1 commitment to the promotion of
the Fundamental Social Rights of Workers"?
According to the hon. Lady's ethos, is it a fundamental social right of workers to be much more heavily taxed in future than they have been in the past?

Mrs. Ellman: The hon. Gentleman does not seem to understand the gist of what I am saying. I again state that I totally reject one of the Conservative Members' major contentions that our continuing membership of the European Union and our support of the treaty would jeopardise our economy in general. On the contrary, I believe that, were we not to ratify the treaty and to withdraw from the European Union, as many Conservative Members seem to want to do, that would be tragic for our economy.
I am not, as the hon. Gentleman suggests, arguing at this point for increased structural funds for specific areas; I am saying that we are at a most critical point, when the very continuation of the eligibility of critical areas such as Merseyside and much of the north-west of England is at stake. Were we unable to proceed with the strong leadership that we now have from the new Government, and were we not to have the good relations that we now enjoy with Europe, those areas identified as in need, where focused funds working with the private sector are making a great difference, might have their funds withdrawn. I am talking about the necessity of the continued eligibility of those areas rather than the necessity of an increase in absolute funding, although that would be most welcome.

Mr. Letwin: I have followed the hon. Lady's argument. I do not agree with her view on funding, but let us assume that she is correct. Has she understood the force of the question asked by my hon. Friend the Member for New Forest, West (Mr. Swayne)? Does she agree that, given that we are a net contributor, the funding that she is talking about could just as well come

from the British taxpayer as from the European Union? So far, the hon. Lady has not made the slightest vestige of an argument for cohesion funds, for membership, for the Amsterdam treaty or for anything under discussion; she has argued in favour of certain subsidies.

Mrs. Ellman: The hon. Gentleman's comments strengthen the view that I have acquired throughout the debate, which is that most Conservative Members— certainly those here tonight—wish to withdraw from the European Union and not ratify the Amsterdam treaty.

Several hon. Members: rose—

Mrs. Ellman: I shall give way in a moment. It appears that, the more that Conservative Members seek to intervene, the more they confirm their basic opposition to this country's continued membership of the European Union.

Mr. Paterson: Let me put my question in incredibly simple language. In order to receive £1 back in European funds, the British taxpayer puts in £1.70. Our submission is that it would be more sensible if the decisions were made by the British Government and the money were not raked off on the way.

Mrs. Ellman: Once again, the hon. Gentleman seems to be advocating withdrawal from Europe. That may be the logical conclusion of the policy that has been officially adopted by Conservative Members and their leader, which is that this country should state now that it has no intention of joining EMU in any circumstances for at least 10 years. Tonight, Conservative Members seem to be confirming that the logical conclusion of such a policy statement—given for 10 years ahead, irrespective of what is to the benefit of this country—is that they are seeking withdrawal from the European Union. If so, perhaps we can have a debate on that subject on another occasion. I shall be pleased to participate.

Mr. Flight: Will the hon. Lady give way?

Mrs. Ellman: I shall give way for the last time.

Mr. Flight: The treaty and the single currency will inevitably require major changes to the subsidisation arrangements in the European Union—I hope to expand on this point later—and the part of the world that the hon. Lady represents is likely to do a lot worse in the future than it is doing today. There will be economic regions, particularly in the southern parts of the European Union, that will have the main call on that which is available for cross-subsidisation. I suggest that focusing on the benefits to her area is not an argument in favour of what is now going on in Europe.

Mrs. Ellman: The hon. Gentleman confirms the major argument that I am seeking to make: we are at a critical point because the enlargement of the European Union is taking place. It is critical that this country should maintain its relationship with the European Union and decision makers throughout Europe to ensure that our vulnerable regions get the best possible deal from Europe. I am grateful to the hon. Gentleman for reinforcing my argument.
It was ironic to listen to Conservative Members object to sections of the treaty on the ground that it would lead to further centralisation. I found it ironic, because my practical experience of dealing with Europe to bring vital investment, training and funding to Lancashire specifically and the north-west of England in general revealed to me that those benefits were gained because of the flexibility of the European Commission.
Together with colleagues from the private sector and fellow local authority representatives, I took part in delegations to the European Union and had meetings with commissioners and their staff. By arguing the detailed case relating to the economy of our areas, we were able to be decisive in persuading the European Union to define its boundaries for structural funds to reflect economic and social need. We also succeeded in persuading it to set up new funds, such as the Konver fund, to meet the specific needs of our individual areas.
According to my experience, which is shared by many others, the European Union, far from being a centralised monolith, is flexible.

Mr. Bercow: rose—

Mrs. Ellman: I shall not give way again.
If those who are seeking support on behalf of our citizens work out their detailed case, take the trouble to present it clearly and lobby effectively, that delivers valuable results. It did so for the people I represented in the past, and I hope that I will be able to deliver the same results for the people I now represent in Riverside and on Merseyside as part of the north-west.
I look forward to pursuing that case with Ministers in our new Government, because at least they are committed not just to the European Union but to the way in which it might benefit the regions and citizens of the United Kingdom.

Mr. Letwin: I do not think that I can share the brilliance that has been displayed on both sides of the House in the defence of major positions, and I shall restrict myself to a rather narrow argument, which I believe has the sole benefit of being true, about a particular part of article 1 to which amendment No. 65 addresses itself in part.
I refer to article K.7, in particular paragraphs 1 and 6, which give the European Court of Justice, to which my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) alluded in his opening remarks, two new powers relating to justice and home affairs, the so-called third pillar governed by title VI of the treaty of European Union.
In respect of paragraph 1, the new powers are
to give preliminary rulings on the validity and interpretation of framework decisions and decisions
and conventions. Paragraph 6 contains the power
to review the legality of… any rule of law relating to its application
of those same framework decisions, decisions and conventions.
A rational inspection of the history of this matter, of what is in the treaty and what we are being asked to pass into English law will show that this is part of what may best be described as the long march of the European

Court of Justice toward ultimate power. Let me briefly review the history of its involvement in justice and home affairs.
In the original treaty of Rome—the treaty of the European Communities—the European Court of Justice had no involvement whatever in the area of justice and home affairs, because articles 164 to 188, which set up the ECJ at that time, gave it jurisdiction over matters concerned with that treaty, which did not refer at all to the so-called third pillar.
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In the Maastricht treaty—the treaty on European Union—article K.3 did give the European Court of Justice a potential role in these matters, but it was carefully circumscribed. My right hon. Friend the previous Prime Minister—no doubt aided by the previous Home Secretary, my right hon. and learned Friend the Member for Folkestone and Hythe—made great efforts to ensure the circumscription of that role.
Article K.3 says that the member states may "draw up conventions" about justice and home affairs specifically decided to be conventions, not decisions or framework decisions, and adds:
Such conventions may stipulate that the Court of Justice shall have jurisdiction to interpret their provisions and to rule on disputes regarding their application, in accordance with such arrangements as they may lay down.
In other words, the power to invoke the European Court of Justice was specifically restricted to agreements within conventions made by member states, and was not on the face of the treaty, a point which I am sure that my right hon. and learned Friend the former Home Secretary insisted on in the negotiation of that treaty.
I have taken the trouble to investigate some of the conventions that have been drawn up under that provision. I have one here, 97/C 195/01, which no doubt Labour Members, with their deep familiarity with the progress of European law, about which they display such enthusiasm—

Mr. MacShane: Conservative Members do not know any of them.

Mr. Letwin: From a sedentary position, the hon. Gentleman says that we do not know, but I can assure him that my hon. Friend the Member for Stone (Mr. Cash) knows this text by heart. The text in question is directly relevant to the question that we are addressing in article 1 and to amendment No. 65. It happens, by a subtle irony, that it relates to the fight against corruption by officials of the European Communities and officials of member states.
Exactly as envisaged in the Maastricht treaty, one part of the convention allows for the intervention of the European Court of Justice. It says specifically in article 12:
The competence of the Court of Justice provided for… shall be subject to its acceptance by the Member State concerned in a declaration to that effect".
In short, under the treaty of European union, the role of the ECJ in arbitrating disputes about conventions drawn up in the area of the third pillar was specifically restricted to acceptance by member states of such interventions on a case-by-case basis.
The position in the Amsterdam treaty is very different. When we move toward the Amsterdam treaty, we move


to the new powers given in article K.7, which will be incorporated in English law if article 1 is incorporated in our law. Those are powers to give, in the first place,
preliminary rulings on the validity and interpretation
of decisions in relation to the third pillar—justice and home affairs.
The words "preliminary rulings" may sound innocuous; indeed, they may be designed to sound innocuous to the untutored ear. What more innocuous item could there be than a mere preliminary ruling? Alas, that apparently innocuous status is illusory. A glance at any of the standard texts, such as Craig and de Burca, shows that there has been a clear trend in the use of the preliminary rulings that article 177 of the treaty of Rome, which established the European Communities, gave rise to. I want to quote that authority for the illumination of the Committee—

Mr. Swayne: The line of argument that my hon. Friend is developing represents a fundamental shift in the balance of power between European institutions, and an immense gaining of power by the Court of Justice. Does he consider that this form of constitutional model—possibly an extreme variant on the American constitution, with its Supreme Court—ought at least to have merited some discussion, if not a constitutional convention?

Mr. Letwin: I am most grateful. As my hon. Friend will see, things are even worse than he supposes.
I return to the preliminary rulings and what the authority that I mentioned had to say about them:
There would have been few commentators, at the inception of the treaty"—
the original treaty of Rome—
who could have guessed at the importance which this Article would have had in shaping both Community law and the relationship between the national and Community legal systems.
The authors of the text make that comment because the power to issue preliminary rulings has been one of the great engines of judicial intervention by the ECJ in a wide range of activities throughout the Communities. Now, the ability to give preliminary rulings in relation to justice and home affairs will inevitably lead to just such a wide scope for judicial intervention in the areas covered by the third pillar.
It gets worse, because of paragraph 6, which gives the ECJ the right to review the legality not of framework decisions, conventions or other items of Community law but of any rule of law relating to the application of those aspects of Community law by member states. In short, it gives the European Court the right to review the legality of rules of law established by the member states themselves when applying framework decisions to justice and home affairs.
I return for a moment to the example that I have chosen, the convention on corruption, to see just what this means. That convention, to which the UK is a signatory, states that each member state
shall take the necessary measures to ensure that the conduct"—
it specifies the type of corrupt conduct—
is made a criminal offence".

Under paragraph 6 of the treaty of Amsterdam, which, by means of the incorporation of article 1, is to be incorporated in English law, the European Court of Justice will be given an unambiguous right to rule on the legal validity of any actions taken by the House to institute English criminal law which will govern corruption—in the case of this convention—perpetrated by English or UK officials. That is a departure of the utmost importance, not just in itself but because of its precedent effect. It suggests that the ECJ is to be given power to make rulings for the first time on the validity of English criminal law.
As I told my hon. Friend the Member for New Forest, West (Mr. Swayne), the situation is even worse than it might appear. It is not merely that this seemingly innocuous paragraph gives this right to the ECJ; it is not merely that it forms a bridgehead into much greater powers, deploying the whole scope of teleological interpretation—about which many of my hon. Friends have spoken, and for which the European Court is famed—to make judicial decision making the means of advancing the cause of integration. It is that it is a transfer that directly contradicts statements made to the House by the Prime Minister, who, on 18 June, said:
In the justice and home affairs area… such co-operation will remain intergovernmental and subject to unanimity. Thanks to amendments that we also secured"—
I remember distinctly that he preened himself at that moment—
the European Court will have no authority to decide cases brought in United Kingdom courts on those issues."—[Official Report, 18 June 1997; Vol. 296, c. 313.]
In making those statements, the Prime Minister convicted himself of either not having read and understood the treaty to which he is a signatory, or not having intended to reveal to the House what it contained. It behoves him either to come back to the House and defend his position, or to instruct his right hon. and hon. Friends to accept an amendment that would make his statements on 18 June true. Without that amendment, they are indubitably false.
We are discussing not merely the development of the European Union, but the incorporation into English law of something that the prime architect and sponsor of Her Majesty's Government was wholly unaware of—I convict him of no greater sin—when he brought the matter to the House. That is indicative of a far wider and greater problem. The Government have proceeded with a certain levity, and have regarded the treaty as a matter of no importance. They have suggested that nothing in it has the slightest constitutional impact.
Some Labour Members have made excellent speeches of an opposing tendency, and some have been present for the debate, but the Government have used bleepers to tell other Labour Members to stay away from this unimportant debate. They have been much encouraged by the Liberal Democrats, who have not been present for large parts of the debate. It is the spirit of wilful and invincible ignorance of the contents of the treaty that Conservative Members most fear.
The greatest danger for this country is not what lies in the treaty, but the Government's attitude. They encourage the British people to be innocent of what is in the treaty, so that they will discover only after the fact that great


strides forward have been made by European institutions to acquire powers that it was never announced to the British people they were being given.

Dr. Palmer: One of the most interesting aspects of the debate, and of the way in which the amendment was introduced, was the ballet between the hon. Member for Stone (Mr. Cash), who is on his way out of the Chamber, and the right hon. and learned Member for Folkestone and Hythe (Mr. Howard). The hon. Gentleman claimed that he was speaking for the whole of the Conservative party. Very wisely, the right hon. and learned Gentleman made no such claim. Their approaches to the amendment complemented each other.
It is striking that, when the right hon. and learned Gentleman introduced what is essentially a wrecking amendment that would prevent Britain from accessing the treaty of Amsterdam, he gave as his reasons points of tiny detail. He spent a considerable time dealing with article K.12, which states:
If a member of the Council declares that, for important and stated reasons of national policy, it intends to oppose the granting of an authorisation by qualified majority, a vote shall not be taken.
The right hon. and learned Gentleman said that the European Court of Justice might be able to state that those reasons were not important. Anyone who examines that sentence cannot seriously maintain that it sustains that interpretation.
Not satisfied with that, the hon. Member for Stone suggested that the passage could mean that the European Court of Justice could decide whether the European Union could commit military forces, for instance in Bosnia. The right hon. and learned Gentleman did not dissent, although the entire article K relates only to police and internal security matters.
The Conservative attack on the treaty of Amsterdam again and again failed to focus on the main issues, and again and again returned to points of detail. We heard, for instance, the hon. Member for Stone arguing that the European Court of Justice should be allowed to give dissenting opinions.

Mr. Hayes: I regret that I have interrupted the hon. Gentleman's charismatic performance. Am I right in thinking that I heard him say that we should be dealing with the broad aims of the treaty rather than the detail? Surely the detail is what we should be examining. If we do not consider the details of treaties, what are we here for?

Dr. Palmer: I am grateful to the hon. Gentleman for his interesting intervention. The problem is that the Conservative Opposition focus on minor aspects of the treaty, which, when examined more closely, disappear into thin air. They do not address themselves to the central details.
Should dissenting opinions be allowed in the European Court of Justice? Apparently it is an extremely important matter, but such opinions would change nothing in the decisions of the court. The issue was sufficient, apparently, to detain Conservative Members for some time. Is it Conservative policy that dissenting opinions should be allowed? The right hon. and learned Member for Folkestone and Hythe described it as an interesting

point which had been forcefully expressed, but he did not express his opinion one way or the other. I do not know whether he wishes to do so now—obviously not.
Another dog that has not barked is the question of a referendum. There was a time when the Conservative party favoured a referendum on the treaty; is that still its position? We should be grateful to know. Some Conservative Members nod their heads and others are shaking their heads. We see also the absolutely immobile head of the shadow Foreign Secretary.
Hon. Members on both sides of the Chamber have talked about a single currency. They drew attention especially to the impact on regions. It should not have escaped their attention that we have a single currency in the United Kingdom, where there are considerable differences in economic development. I do not know whether hon. Members who are opposed on principle to a single currency for the next 10 or 15 years, or for whatever number of years, would favour breaking up the single currency in Britain so that we might have one currency for each region, allowing for devaluation for Merseyside and Scotland, for example. Or do they accept a single currency in Britain but for some mysterious reason do not accept it in Europe?

Mr. Blunt: The hon. Gentleman should be aware that within the United Kingdom, which he is correct to say is a single currency zone, there are enormous transfers within the tax and benefit systems to ameliorate the consequences of a single currency. The system ensures that, for example, people I represent in Surrey probably pay a significant amount of tax and receive fewer benefits than the people in Liverpool or Scotland. That is the sort of system that will have to be introduced to support a single currency within the European Union. That requires democratic authority and federal government to make things work.
When the hon. Gentleman responds to my intervention, will he make it clear that he accepts that a single currency move is the greatest step towards a united states of Europe? As I have said, it will not operate without democratic authority at a federal European level.

Dr. Palmer: I am grateful that the hon. Gentleman had time only to ask a question rather than to make a speech.
A single currency is coming whether we wish for it or not, and the question is whether Britain should be part of it.

Mr. Blunt: Will the hon. Gentleman give way?

Dr. Palmer: I will carry on for the moment. I will return to the hon. Gentleman's point.
The hon. Member for Stone spoke of the glorious past, when we had an empire and a single currency throughout the world up to a point, but he used that argument to oppose the development of a single currency in Europe. We have the choice of isolation in the European Union, withdrawal from the EU or working with our partners in the EU and within the single currency. That is the reason why Britain under a Labour Government has accepted that there is no constitutional bar to working together within a European single currency.
If there were a constitutional bar, there would be only two alternatives—isolation, as practised by the last Conservative Government, or withdrawal. We know that


there are hon. Members who favour withdrawal and hon. Members who favour isolation, but Conservative Front-Bench spokesmen will not say which they favour.

Mr. Bercow: To coin a phrase, I fear that the hon. Gentleman is suffering from a refreshing outburst of frankness and candour. I have followed the logic of the argument closely. The thrust of the argument seems to be that the single currency is inevitable anyway, so we have to sign up to it. May I therefore invite him to tell the Committee whether he believes that, if the Community goes forward with a single currency and adopts a common direct taxation system as its accompaniment, we have no choice but to accept that as well?

Dr. Palmer: We have two choices: influencing the European Union's development and how the currency is implemented, or isolation, which the hon. Gentleman's party developed, signally failing to influence the development of the currency.

Mr. Blunt: Will the hon. Gentleman give way?

Dr. Palmer: I am aware that other Members wish to speak, so I am going to finish. I am sorry, but I will not give way again.
We need the European Union because it is the only body in Europe which is large enough to enable to us to grapple with the economic, environmental and trade challenges that we face. We cannot face them effectively on our own. The EU needs us because, without us, it will not be as effective as it can be. It wants us to take part and we want to work with it, in contrast with the previous Government. The treaty of Amsterdam is an expression of that common will to work together. It makes sense, and only the diminishing ranks of the Opposition fail to realise it.

Mr. Bercow: I am stunned by the contribution of the hon. Member for Broxtowe (Dr. Palmer). He has done the Committee a signal service: he has broken ranks with hon. Members who spoke before him. Not for him the language of national independence, but support for the practice of federalism. From him, it is crystal clear what we are getting: support not only for the practice, but for the principles, of federalism.
The hon. Gentleman did not disavow or eschew that, or seek to deny the thrust of the criticisms of his position. Instead, he seemed to accept what Conservative Members have consistently argued: the logical corollary of entry to economic and monetary union is the adoption of a common direct taxation system. To all intents and purposes, it is clear that we would get a federal centralised Europe in which scope for individual decision making would no longer exist.

Dr. Palmer: rose—

Mr. Bercow: I happily give way to the hon. Gentleman if he wishes to correct that interpretation of his position.

Dr. Palmer: I thank the hon. Gentleman for giving way. In view of the lack of time, let me simply tell him

that I said no such thing. What I said was that expressing our willingness to work within the European Union and with monetary union gives us a chance to influence the way in which monetary union takes place.

Mr. Bercow: I thank the hon. Gentleman for clarifying his position, but, sadly, whatever he may think, what he says does not in any way detract from what I have just said about his position. The reason is simple. The hon. Gentleman believes that, if the rest of the European Union chooses to proceed with a single currency, we can argue about the detail, the way in which the currency will be developed and how it will be implemented, but we have no realistic alternative to participating in it.
Similarly, it must logically follow from the thrust of the hon. Gentleman's speech that, if the European Union chooses to adopt a common direct taxation system— although we can argue about the detail, express an opinion about the way in which the system is implemented or offer a judgment about the level of direct taxation—we have no serious alternative to participating in that system.

Mr. Hayes: The hon. Member for Broxtowe (Dr. Palmer) said—no doubt Hansard will bear this out— "We have no choice." He did not suggest merely that we were there influencing affairs, as he subsequently claimed in his brief intervention; he said that this was determined and inevitable, and that we had no choice.

Mr. Bercow: As ever, my hon. Friend has been helpful in elucidating the truth, and distinguishing it from the way in which—moments after sitting down—Labour Members seek to rewrite history. My hon. Friend is an attentive observer of debates of this kind, and, as always, I am grateful to him for his voluntary co-operation in my speech.

Mr. Letwin: I thank my hon. Friend for his patience in giving way to me a second time. I hope that he will join me in adding a codicil to what my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes) said a moment ago. Could it not be said that the hon. Member for Broxtowe (Dr. Palmer) suggested earlier that he would like to join the top table in order to be eaten?

Mr. Bercow: As ever, my hon. Friend makes his point beautifully and succinctly. Clearly, the experience of collectivism is always, everywhere and without exception to be preferred to that of isolation. The fact that being isolated in a particular circumstance might allow one to continue to live apparently does not spoil the beauty of being eaten as part of a collective.

Mr. Gapes: Can the hon. Gentleman tell us how many other parties of the Conservative and Christian Democrat right in the whole European Union and all the applicant countries agree with him?

Mr. Bercow: I am fascinated by the hon. Gentleman's thesis, although I am not sure which parties he has in mind.

Mr. MacShane: Answer.

Mr. Bercow: I am happy to answer. The hon. Member for Rotherham (Mr. MacShane), who spends a great deal


of time outside the United Kingdom, is becoming rather excited, but I can tell the hon. Member for Ilford, South (Mr. Gapes) that most of his friends elsewhere in the European Union have the guts and integrity to admit that the position that they support means the achievement of a federal Europe. I am saddened that the hon. Gentleman cannot permit himself a similar candour.

Mr. Gapes: rose—

Mr. Bercow: As you know, Sir Alan, I have been extremely generous in giving way to Labour Members. I shall not continue to do so, for the simple reason that I feel an irresistible urge to develop a couple of points without being interrupted by them.
I want to focus on two points. The first is the incompatibility, in article 1, between the commitment to the fundamental social rights of workers and the reference, a mere 284 words later, to economic and monetary union, including a single currency. When I have dealt satisfactorily with that, I shall move on to the subject on which my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), the shadow Foreign Secretary, was especially eloquent—the pernicious new provision for European Union competence in respect of human rights.
On economic and monetary union, let it be clear beyond peradventure what the treaty states. It refers to the fundamental social rights of workers. It says that at the outset. I want to know from Labour Members, and I should be interested to see whether the Minister is capable of an answer on this point, how that is compatible with the commitment to economic and monetary union and the adoption of a single currency.
9.45 pm
Let me make the point explicitly, so that the Minister has no reason to ignore it as the debates progress. Is it a fundamental social right of an individual worker within the European Union to make a representation about the conduct of monetary policy under the single currency by the European central bank? Is it a fundamental social right of a worker to be able to enjoy an interest rate that reflects the economic circumstances of the country in which he or she lives, rather than the preferred wisdom of a group of bankers whom he or she does not elect and cannot remove?
We need to know from the Government whether they understand the difference and the inconsistency between the commitment, on the one hand, to the principles of democratic self-government, and the fact, on the other, that people will be entitled to no say—if the treaty proceeds and the single currency goes ahead—in the conduct of monetary policy.
It is simply beyond belief that right hon. and hon. Members on the Government Front Bench are not aware of the incompatibility between those two positions. Many Opposition Members believe that the commitment to what are called social rights is as near to meaningless as not to matter. We do not see any advantage to the citizens of the United Kingdom from adoption of the social chapter or acquiescence in the social charter.
We see no merit in that, but we respect the fact that there are right hon. and hon. Labour Members who would see some merit in that. We cannot understand, however,

how they can claim to be committed to fundamental social rights, yet not understand the incompatibility of that position with support for a single currency. How can it be right that a single currency, with a single monetary policy, a single fiscal policy, a single taxation policy and, to all intents and purposes, a single economic policy should be imposed on the citizens of this country, without their knowledge, let alone their approval?
The Government cannot run away from the issue for ever. Elsewhere in Europe, the debate is conducted probably with equal intelligence, but with a degree of candour. Those who support the development of a federal Europe in countries other than the United Kingdom are prepared to say so.
I challenge the Minister to explain how he can continually say that he does not favour a federal Europe, yet can sign up with unbridled enthusiasm to a treaty that indubitably takes this country increasingly in a federalist direction. I appeal to the hon. Gentleman to explain the mismatch between the rhetoric and the reality.
I do not know what the hon. Gentleman's constituents were saying to him on the subject during the election campaign, but, when I was canvassing during the election—this has been the experience of my right hon. and hon. Friends as well—we consistently met people, day after day, who were fed up with the conflict between the commitment to a free, democratic and independent Europe, and the reality of an increasingly centralised and undemocratic European Union.
The Minister is drenched in the day-to-day party political conflict, but he must understand that I do not develop my argument on that basis. I am the first to concede that some people in my constituency were unwilling to vote Conservative on 1 May because they were insufficiently persuaded that we would resist the drive towards centralisation. If I had been accompanied by my right hon. and learned Friend the Member for Folkestone and Hythe during that campaign, I do not doubt that I would have had even greater success in dissuading them from that view. However, some people were concerned about the Conservatives on that account.
The Conservatives are explicit and honest. The hon. Member for Harlow (Mr. Rammell), who courteously gave way many times, correctly acknowledged that we have been absolutely consistent. We say that we are for free trade, not federalism; that we favour co-operation not coercion; and that we believe in a European Union of independent and co-operating nation states, but are wholly and irrevocably opposed to a single European state. Because we oppose a single European state, we oppose moves in that direction. That is why we oppose the treaty of Amsterdam.
If the Minister wishes to advance an argument in support of federalism, the Committee will doubtless be fascinated to hear it. The Conservatives would disagree with him—my hon. Friend the Member for West Dorset (Mr. Letwin) would dissect his argument brilliantly and ruthlessly—but we would hear him with respect. We would acknowledge the integrity of his argument and recognise that it is consistent with the policies for which the Government vote and for which Ministers negotiate. However, we cannot understand, and we surely cannot be expected to respect, the practical signature to, and consent for, federalist policies accompanied by a rhetorical denial that that is what the Government want.
I move from the subject of economic and monetary union—profoundly undemocratic as it is—to the provision on human rights to which my right hon. and learned Friend referred eloquently much earlier in the Committee's proceedings. The Minister must respond. Many hon. Members on Opposition Benches—and, I wager, a few on the Government Benches—are genuinely anxious about article F.l. [Interruption.] Chuntering from a sedentary position, as though he resembled the village idiot, does the Minster no good. That is not good enough. The hon. Gentleman must listen to the point and respond to it.
The reality is that the provision on human rights is pernicious. The reason can be stated simply: the provision is unnecessary. Member states are signatories to the European convention on human rights and to the United Nations charter. Member states within the European Union are united in their support for the principles of liberty, the rule of law and democratic self-government.
I challenge the Minister or the Foreign Secretary to answer—not abuse—the point that my right hon. and learned Friend has made: if a member state fails to respect human rights, surely it is better to expel that state from the European Union than say that a member state that falls foul of majority, at a given time, should be punished for so doing but still required to stick to its Community obligations. That is not an honourable or a defensible position.
I shall state our concerns in practical terms by offering the Minister three examples. I shall give way happily if he is capable of responding seriously to any of them.
The first example is the minimum wage. What is to stop the European Union deciding that there is a fundamental human right to a minimum wage at a given level? The issue is not whether the Minister thinks that a minimum wage should be a fundamental human right. The question is: what is to stop the European Union, after signature and ratification of the Amsterdam treaty, from so deciding? If it so decides and the United Kingdom believes that it is unacceptable and refuses to go along with it, this country would presumably then be subject to the penalties that the treaty envisages—while, of course, still having to honour its community obligations.

Mr. Letwin: Is my hon. Friend aware of the great force of his remarks in the light of the fact that many of the statements about human rights specifically refer to slave labour and to excessively low wages?

Mr. Bercow: That is precisely right. Our concept of human rights, and specifically of what constitutes economic rights, is different from that of other member states of the European Union. As I am sure that my hon. Friend has anticipated, that is at the heart of my concern on this point. I challenge the Minister to state categorically that the European Union would not invoke new article F.1 in justification of the application of a mandatory Communitywide minimum wage of a given level to which all member states were obliged to conform. That is the first example.
The second example that I offer the Minister—if he is able to contain his impatience for only a moment, and to exercise what self-restraint he can muster—is a situation

in which the United Kingdom were to decide that it supported the right to the practice of homosexual sex at the age of 18, but declined to support it at the age of 16. If the rest of the European Union opted for a policy of allowing it at the age of 16 and we deviated from that policy, could it not be held that we had breached a fundamental right as espoused by the European Union? What recourse would we have?

Mr. Cash: Does my hon. Friend accept that the notion of sexual orientation could easily include paedophilia? Does he agree that it was absolutely reprehensible to include a sexual orientation policy as a part of fundamental human rights when we are denied the idea of self-determination as a sovereign nation?

Mr. Bercow: I entirely endorse my hon. Friend's comments. It would be a bizarre situation.
Against that situation, however, I contend—I think that many Conservative Members would agree—that we have no protection if we sign the treaty. The Minister will probably think, "It might not happen; it probably won't happen; and, if it does happen, my right hon. Friend the Prime Minister will have moved me on to some other ministerial post by the time that it does happen." That is not a satisfactory answer to Conservative Members.

Mr. Swayne: Does my hon. Friend agree that it is more likely that such a challenge will be mounted in the social sphere? The treaty makes it clear that the principles on which judgment will be given are not in this treaty but are laid down in the social charter. They are laid down not in the Maastricht social provisions, but in the social charter.

Mr. Bercow: My hon. Friend is absolutely right to draw attention to the dangers of the social charter. The social charter has been much ignored in our debates, but it contains provisions that are infinitely more threatening to United Kingdom citizens than anything that is in the social chapter.
I am inviting the Minister to offer some proof that we have protection against those developments. He sits there chattering away to the Minister of State, Foreign and Commonwealth Office, the hon. Member for Leeds, Central (Mr. Fatchett), but he has nothing to say. He has advanced no argument. He responded to no point made by my hon. Friend the Member for Stone (Mr. Cash), and he sat in blithe ignorance of the potency of the arguments made by my right hon. and learned Friend the shadow Foreign Secretary. It is breathtaking that the Minister can sit there, preoccupied with nothing other than where he is going when he leaves the House at the end of the evening, so that he is not able to respond to the thrust of the arguments deployed against him.
The reason that we oppose article 1 and the treaty—

Mr. Gerald Bermingham: On the issue of where everyone is going in about one minute, does the hon. Gentleman agree that section 28 of the Mental Health Act 1983 probably applies in his case, and that the sooner two men in white coats come to remove him, the better?

Mr. Bercow: I hope that I can be forgiven for wondering whether the hon. Gentleman is experiencing the after-effects of an extremely agreeable dinner, but that does not detract from the point—

It being Ten o'clock THE CHAIRMAN left the Chair to report progress and ask leave to sit again.

Committee report progress; to sit again tomorrow.

EUROPEAN COMMUNITY DOCUMENTS

Mr. Deputy Speaker (Sir Alan Haselhurst): With permission, I shall put together the motions relating to European Community documents.

Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

FOOD LAW

That this House takes note of European Community Documents Nos. 8150/97, on the general principles of Food Law in the European Union, and 8386/97, on Consumer Health and Food Safety; and endorses the Government's intention to support and contribute to the development of an EC food policy which delivers high standards of food safety, fully reflects the needs of consumers and contributes to the development of an effective Single Market.

HARMFUL TAX COMPETITION

That this House takes note of the Commission Communications (10427/97) of 1st October 1997 Towards tax co-ordination in the European Union — a package to tackle harmful tax competition and (COM(97)564) of 5th November 1997 A package to tackle harmful tax competition in the European Union: and supports the Government's position as set out in its Explanatory Memorandum (COM 97(564)) of 17th November 1997.—[Mr. Pope.]

Question agreed to.

NORTHERN IRELAND

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),
That the draft Civil Evidence (Northern Ireland) Order 1997, which was laid before this House on 28th October, be approved.— [Mr. Pope.]

Question agreed to.

STANDARDS AND PRIVILEGES COMMITTEE

Motion made, and Question proposed,
That Miss Ann Widdecombe be discharged from the Committee on Standards and Privileges and Mr. Martin Bell be added to the Committee.—[Mr. Mudie.]

Hon. Members: Object.

SOCIAL SECURITY COMMITTEE

Motion made, and Question proposed,
That Siobhain McDonagh be discharged from the Social Security Committee and Mr. Paul Goggins be added to the Committee.— [Mr. McWilliam, on behalf of the Committee of Selection.]

Hon. Members: Object.

Mr. Douglas Hogg: On a point of order, Mr. Deputy Speaker. It might be helpful for you to know that I have absolutely no objection to the hon. Member for Tatton (Mr. Bell) sitting on the Committee on Standards and Privileges, but I feel that the House should have a further opportunity to debate the procedures that that Committee adopts with regard to Members who are charged with some form of misconduct, because previous cases have shown that there is a denial of natural justice. I do not object to the hon. Member for Tatton personally, but I want to promote a debate.

Mr. Deputy Speaker: I am sure that the right hon. and learned Gentleman recognises that that is a point of explanation and argument rather than a point of order for the Chair.

Orders of the Day — PETITION

Hunting

Mr. Graham Allen: Unaccustomed as I am to speaking in the Chamber, as I come from the Whips' Office, I wish to present a petition to the House ahead of tomorrow's debate on whether to ban fox hunting. The petition states:
We the undersigned being constituents of Nottingham North commend the new Labour Government in allowing a free vote in Parliament on whether hunting with hounds should be banned by legislation. We therefore call upon our local Labour Member of Parliament, Graham Allen, to vote in favour of banning hunting with hounds—
something that I do very gladly. The petition continues:
We are totally opposed to this barbaric sport and demand greater protection for all defenceless wildlife. We believe that Parliament should support Michael Foster MP's Bill to ban hunting with hounds and respectfully request that the House of Commons should take this opportunity to outlaw this horrific sport.

To lie upon the Table.

Wharfedale General Hospital

Motion made, and Question proposed, That this House do now adjourn-[Mr.Pope]

Mr. Paul Truswell: I am grateful for the opportunity to raise this important issue in an Adjournment debate. The future of Wharfedale general has long been a subject of local debate and concern in the communities it serves. The hospital is highly regarded. Performance indicators prove that it provides quality care, efficiently and effectively, to more than 6,000 in-patients and day-case patients a year, as well as to many out-patients.
A business plan produced by the United Leeds Teaching Hospitals NHS trust to justify the continuation of the hospital listed a number of strengths. They included the loyalty of purchasers, the commitment of staff and the community, the range of services and accessibility, the availability of parking, no or low waiting lists—a crucial issue—a broad range of open-access therapy services, a wide range of purchasers, a strong minor injuries unit, and a potentially valuable site.
About 40 per cent. of the hospital's patients are drawn from the Guiseley, Yeadon, Rawdon and Horsforth communities within my constituency. A similar number come from that of my hon. Friend the Member for Leeds, North-West (Mr. Best). I trust that he will succeed in catching your eye at the appropriate moment, Mr. Deputy Speaker.
One of the hospital's greatest advantages is that it provides such excellent care away from the expensive, high-tech, congested, city-centre-based teaching hospital of Leeds general infirmary. Two years ago, the debate on the future of the hospital appeared to have reached a critical, yet positive, watershed. The United Leeds hospital trust began a consultation process on where a new Wharfedale general might be built. That seemed to imply that the hospital's future was secure.
That sense of security has been backed up in a variety of planning documents in recent years—for example, the trust's own business plan and strategy, and the Leeds review—a major examination of acute health care in the city—and more recently in Leeds health authority's consultation document, "The Future of Health Services in Leeds". Each of those important documents has acknowledged the vital future role of the hospital.
Given all that apparent commitment, why have I insisted on keeping my hon. Friend the Minister from his cocoa? In July 1995, almost two and a half years ago, the trust submitted an outline business plan to the regional office of the national health service executive. It was at that point that the circumstances that gave rise to tonight's debate began to unfold, and then to fold up.
Initially, the issue became a ping-pong game between the NHS executive and the United Leeds hospital trust. Ping—the trust served up its outline business plan in July 1995. Pong—the regional office eventually returned it requiring more information. Ping—the trust went for an outright winner by supplying more information, but— pong—the region lobbed it back. Backwards and forwards it went.
The game was an infuriating spectacle for the local community that is served by the hospital. But worse was to come, for there came a time when there was neither

ping nor pong, but merely a deafening silence. It seemed that the ball had disappeared, and each side seemed to be claiming that the other had it in their pocket.
I do not want to take up valuable time relating all the minutiae of this Byzantine farce. Three short quotes will serve to sum up the impasse that I hope this debate will help to remove. David Hall, the chair of the trust, told me two weeks ago:
We have done everything humanly possible to meet the requirements of the Regional Office in producing our outline business plan.
Mr. Ron De Witt, the chief executive of Leeds health authority stated during the same discussion:
The Trust's business plan is one of the best I have ever seen.
However, Dr. Bill Kirkup, director of the region's NHS trusts division told me:
We definitely see a future for Wharfedale General, but we cannot approve the Trust's Outline Business Plan on the strength of a business case from 1995 updated by a series of addenda.
I am reminded of the much-quoted song from the Fred Astaire musical—Leeds says "potayto", the region says "potahto", Leeds says "tomayto", the region says "tomahto", and so on. The crunch comes in the song's punch line:
Let's call the whole thing off.
Local people fear that, if this continues, the whole thing will eventually be called off. Their fear is understandable.
As I have tried to show, precious little progress has been made in planning the hospital's long-term future. However, day by day, a great deal is happening, and it is not good. In the past month, a ward has closed. Last week, the trust agreed a package of further cuts that will dramatically affect the hospital. The hospital is like a cherished old friend dying of starvation because his doting hosts cannot decide what to feed him on. Whether the menu is potato or potahto, the planning process is, at best, in a persistent vegetative state. Some might say that, bereft of life, it lies extinct.
I do not ask the Minister to play the pathologist and carry out a post mortem; I would prefer him to cast himself in the role of casualty consultant and resuscitate the ailing patient. To be cruder, I hope that he will figuratively, if not literally, apply some firm shoe leather to the appropriate part of the NHS management anatomy to jolt it back into some form of activity. I realise that such treatment is contained in no medical text, but everyone connected with the hospital despairs of the planning paralysis.
I conclude with three appeals to my hon. Friend the Minister. First, please intervene to end the state of paralysis. Secondly, please ensure that everyone concerned is clear about what needs to be done. Thirdly, please lay down a time scale within which we can expect those objectives to be achieved.

Mr. Harold Best: I wholeheartedly endorse observations of my hon Friend the Member for Pudsey (Mr. Truswell). I too have been involved with the sort of confusing and bemusing delays that I hope this evening's debate will help to resolve.
Wharfedale hospital, which is in my constituency, has been at the centre of several campaigns, not least during the general election, in which it made a considerable


contribution to the outcome in my constituency. It is one of those wonderful parts of our health service that is at once a community hospital and a general hospital. It serves both functions exceptionally well. It covers a wide area, and several Labour Members present tonight have had and will have constituents in it. I have been in the hospital three times. I live about 13 miles from it. It is often easier to travel the 13 miles to the hospital than it is to travel to the centre of Leeds.
The hospital is in Otley, which is in the beautiful part of lower Wharfedale which I am pleased to represent. The hospital has benefited from generation after generation of community commitment through fund raising and volunteer services. Everyone concerned considers the hospital essential for the provision of the one-class, first-class health service to which I referred in my maiden speech. The people of its catchment area, the people who serve those people, and various bodies including clinicians, have all given credence to the observations of my hon. Friend the Member for Pudsey. It is a fine hospital.
Among those notable bodies is no less a body than Otley town council, which has campaigned for many years to defend the hospital and the services that it offers to the community in its wide geographical band. Some hon. Members who are not present have constituents who benefit from the hospital. It is only fair to say that that campaign by Otley town council has in recent times received considerable support from the local business community. One business has made the offer of land and is prepared to assist with capital in the development of a new hospital in the area.
In short, we have a united group of people in Wharfedale who are in desperate need of a modernised, well-appointed hospital. We are being confounded by what appears to be a lack of concentrated and serious effort to bring about that which is commonly held to be needed. What my hon. Friend the Member for Pudsey had to say is that which we should consider here tonight. I look forward to hearing from my hon. Friend the Minister what he hopes to do.
The need is desperate. There is a need beyond easy measure tonight for a modern and secure Wharfedale hospital. It is my hope that that need will be met soon. I look forward to it, and to hearing what our Minister has to say and what he might do.

The Minister of State, Department of Health (Mr. Alan Milburn): I congratulate my hon. Friend the Member for Pudsey (Mr. Truswell) on securing the debate, and my hon. Friend the Member for Leeds, North-West (Mr. Best) on contributing to it. They have both raised issues which are clearly significant for the people of the area that they represent, and those nearby. The issues that they have raised have wider implications for the national health service, and the way in which we plan our local health services.
As both my hon. Friends have made clear, Wharfedale hospital is above all else a popular hospital, but it is an old hospital. It has its origins in the last century. Most of the present buildings were developed in a piecemeal fashion between the second world war and the 1960s. I understand from what I have heard this evening and from earlier conversations with my hon. Friends that the

accommodation is in poor condition, and that it is unsuitable for providing health care into the next century. As my hon. Friend the Member for Pudsey implied, proposals to replace the hospital with more suitable premises go back over 10 years. Sadly, none has made much progress. I understand the frustration that this must have caused my hon. Friend and his constituents.
My hon. Friend the Member for Leeds, North-West described the process as bemusing, and I understand why. As recently as 1995, responsibility for Wharfedale hospital passed to the United Leeds Teaching Hospitals NHS trust, which concluded that the hospital was unsustainable in its present buildings.
At that time, I ask my hon. Friends to recall, the NHS around Leeds, as elsewhere, was being asked to operate in an environment of competition, in an internal market for health care. The populations served by Wharfedale hospital were the responsibility of three health authorities—Leeds, Bradford and North Yorkshire—and significant services were also purchased by fund-holding GPs.
Hospital and community services trusts in Airedale, Bradford and Leeds would have been affected by any change in the nature and extent of services provided at Wharfedale, perhaps in some cases critically affected. The problem was that there was no mechanism to enable a co-ordinated approach to be taken across those various organisations, to ensure that plans were integrated and coherent.
In this context, it is important to note that Wharfedale hospital is situated in a town of some 12,000 people, but its catchment population amounts to almost 200,000. My hon. Friend the Member for Leeds, North-West made that point graphically when he spoke about his own experiences of Wharfedale.
My hon. Friend the Member for Pudsey described what had gone on as a game of ping-pong. Certainly people in the local community must not have known whether they were coming or going. My hon. Friend asked me to play the role of a casualty consultant. I am not sure that I am up to that, but perhaps I can play the role of a management consultant and try to explain what happened in the past under the previous Administration, and bring some clarity to what will happen in the future under Labour Administration.
When any investment is planned in health services— especially a major one—it is vital that, the proposal can demonstrate, first, that the health care needs of the population have been identified; secondly, that they would be met by the investment; thirdly, that the proposed service is sustainable in the future; and finally, that it represents good value for money and is affordable within the overall resources available. All those requirements have to be met for plans to be approvable as a good use of taxpayers' money.
Taking into account those requirements and the fact that, under the internal market system, there was no mechanism for integrated planning, I am not surprised that it was not possible to come up with a sound proposal that got the agreement of all parties and secured the approval of the NHS executive. Nor would I regard that as due to any shortcoming on the part of those involved. It was the product instead of a set of policies—those of the previous Government—which put competition ahead of


collaboration, which prized opportunism above partnership and which led to fragmentation instead of integration.
All this will clearly not do for the people who look to Wharfedale hospital. In bringing to an end the idea of an internal market for health care, the Government will be putting forward a better approach that involves partnerships between all of those who should be involved in the provision of local services. However, I agree with my hon. Friends that this matter can and should wait no longer for resolution. I have therefore already asked officials to look at the matter afresh in the new climate that we have created for planning in the NHS.
From the work that has already been carried out, I have been assured that several key principles have been established. First, there is no doubt that there is a need for a modern health care facility in the vicinity of the present Wharfedale hospital. Secondly, because of the unsuitable state of the existing buildings, new accommodation must be provided. Thirdly, I can assure my hon. Friends that there is no "hidden agenda" to run down the present level of provision in Wharfedale hospital until it becomes unviable. I know that there are real concerns in the community that there is such an agenda, but I assure my hon. Friends that there is not.
In the new environment that we are creating to foster the sensible planning of health services, I am confident that approvable proposals can be drawn up without further delay. I have been assured that my confidence is not misplaced and that discussions to this effect have already occurred between NHS executive officials and local trust

managers. I shall insist that a clear timetable is produced, so that public uncertainty surrounding the future of the hospital can be resolved as quickly as possible.
Towards the end of his speech, my hon. Friend the Member for Pudsey asked me to respond to three appeals, and I am happy to do so. First, it is clear that the planning paralysis has already ended. Our intentions for the future of the NHS have played a part in that, but my hon. Friends' intervention this evening has helped to concentrate the minds of all those involved in the process. Secondly, everyone is clear about what is now needed. Useful and productive discussions have already begun, and I shall ensure that they continue. Thirdly, I have referred previously to the need for a clear timetable, which I shall require of the local managers. I will write to both my hon. Friends when that timetable has been drawn up.
It is vital that there is careful consideration, with clinicians, of the services provided now and in future at Wharfedale hospital to ensure that they represent the most clinically effective arrangements possible for the care of the resident population. I am confident that we now have an environment in the NHS in which such planning can take place in partnership with all the relevant agencies. The result will be the production of a proposal to replace Wharfedale hospital with modern facilities able to offer clinically effective services to meet the health care needs of local people in a way that is both sustainable and affordable. Any proposal will be the subject of full local consultation. Local people continue to demonstrate strong commitment to Wharfedale hospital, and they deserve an early response, which I am pleased to say can and will now take place.

Question put and agreed to.

Adjourned accordingly at twenty-three minutes past Ten o'clock.